IFRS 13 and consolidation of cash flows direct method

Question 2 (40 marks) GreenNam Ltd (GreenNam) is a Namibian compary listed on the Namiblan Stock Exchange, incorporated in 2001 and is a retalier of medicinal products. The company has interests in various subsidiariet and has a 31 December vear end. The group accountant of GreenNam, Mary Jane, has requented you to assist in the finalisation of the preparation of the conselidated statement of cash flows for the GreenNam Ltd Group for the vear ended: The following information relates to the Greenllam Ltd Group GreenNam LTD GROUP FONSOUDATEO STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022 CONSOLIDATED STATEMENT OF PROFT OR LOSS AND OTHER COMPREHENSIVE FOR THE YEAR ENDED 31 DECEMBER 2022 The following additional information tar already been taken into account in the financial statements above: 1. Included in other expenses in the consolidated profit before tax of the GreenNam Ltd group are the following: - Depreciation on plant and equipment NS480 000 - Unrealised exchange gais on foreign debtors (NS127 000) - Realised exchange loss on long term loan N5115 000 - Profit on sale of plant and equipment N\$260 2. Investment in forestry Ltd GreenNam Ltd acquired 200000 shares in forestry ted on 2 January 2021 for a cash amount of N5110 000 when the equity of Forestry was as follow: (10 marks) Norman limited is a business that manufactures a variety of products based in Windhoek, Nairobi. One of the products of the company is high quality fil projectors for cinemas. When the business began several years ago, Norman purchased two machines used in the manufacture of the film projectors. However, in the current financial year ending 30th September 2023, due to an increase in demand for its other more profitable products, the management of Morman limited decided to reduce the output of the projectors to enable more focus to be placed on growing other manufacturing areas within their business. In August 2023, management decided to sell one of the film projectors manufacturing machines. The machine meets all the requirements of IfRS 5 - Noncurrent assets held for sale. Due to the intentional scaling back of the manufacturing output of projectors, this machine is currently operating below its capacity producing 100 projectors a month. When using IFRS 13 income approach, to measure the machines fair value, the accountant is unsure whether to base the measurement on the current actual production of 100 projectors a month or on a production of the full potential capacity of 150 projectors per month. Fair value based on current production N\$ 10,000000. Fair value based on the full potential production NS 12,000000 . - Share Capital (1000000 shares) N5 1000000 - Retained earnings N$100000 GreenNam Ltd purchased another 500000 sharts in tallet Ld for a cath amount of NS1 225000 on 1 January 2022. On this date, GreenNam obtained control over Eallet Ld. The fair value of the plant and equipment (the only asset of Forestry Ltd) was $2500000 on that date. 3. Investment in Plantation Lid GreenNam acquired a 60% interest in Plantation ttd on 1 hanwary 2021. On this date, GreenNam obtained control over Plantation. No goodwill atose at acquitition. GreenNam Ltd sold its entire interest in Plantation on 1 October 2022 for NS1 366.920 . On ther date. GreenNam lost control over Plantation Ltd. Particulars of the net assets of Plantation Ltd on 10 ctober 2022 were as follows: - Plant and Equipment N\$ 1814 - Trade recelvables NS 907200 - Inventory N\$500 - Trade Payables (NS393 000) 4. Interest earned on an investment amounted to NS146 900 for the year and is inclused in other: expenses. Included in finance cost is an amount of N\$14 300 which was stit outstanding on 31 December 2022 5. GreenNam utd declared a dividend of N941 250 for the year ended 31 December 2022 6. The short-term portion of lone-term loans included in short-ferm loans was N57 704 [2021: N\$14 701 ) 7. No land and bulldings were purchased or sold during the year. Plant and Equipment whth a colit price of N\$2 000 and a carrying amount of N5709 was sold for N5989 during the current vear. its estimated that NS12 000 of the current year's purchaces of property, plant and equipmeot netre incurred to expand activitives. 8 Cash flows from dividends and interest paid and received are classified as operating acteviet 9. It may be assumed that no impairment of Roodwill took place. Required Prepare the consoldated statement of cashflows of the GreenNam utd Group b: In December 2022 according to the dires method, Communication stuils presentation and layout ( 1 mark) END OF QUESTION PAPER