Question 1

You are the Accountant of Ryder Ltd Group (Ryder), a company which has diversified and has several subsidiaries and associates. The Groups year end is 30 June. The following information relates to the Group:

	2021	2020
	N$	N$
ASSETS
Non-current assets
Property Plant and Equipment	44 405	57 500
Goodwill	1 030	1 370
Investments in associates	6 000	2 100
	51 435	60 970
Current Assets
Receivables	4 830	4 650
Inventories	5 200	6 800
Bank	18 860	1 835
	28 890	13 285
TOTAL ASSETS	80 325	74 255
EQUITY AND LIABILITIES
Equity attributable to owners to the parent
Share Capital	36 000	25 500
Retained Earnings	21 275	14 760
	57 275	40 260
Non-Controlling Interest	11 355	25 210
TOTAL EQUITY	68 630	65 470
Non-Current Liabilities
Interest bearing borrowings	4 005	1 500
Deferred Tax	3 910	4 630
Total Non-Current Assets	7 915	6 130
Current Liabilities
Trade and other payables and accumulated interest	2 750	1 500
Short Term portion of interest-beating borrowings	600	505
Namibia Inland Revenue Services	430	650
Total Current Liabilities	3 780	2 655
Total Liabilities	11 695	8 785
TOTAL EQUITY AND LIABILITIES	80 325	74 255

Revenue	31 200
Cost of sales	-11 840
Gross Profit	19 360
Net Operating Costs	-7 320
Finance Costs Paid	-240
Income from associates
Share of profit in associates	270
Dividends received	120
Profit before tax	12 190
Income tax expense	8 710
Profit attributable to:
Owners of the parent	7 715
Non-Controlling Interest	995
	8 710

Additional information:

1. On 1 March 2021, Ryder increased its 70% interest in Manard Ltd to 90%, at a total cost of N$10 000. The purchase price was settled partly by issuing 1000 shares of N$1 each for N$7000 The remainder was paid in cash. At the date of acquisition of the interest, the net assets of Manard were as follows:

ITEM	N$
Property Plant and Equipment	52 500
Receivables	3 800
Interest-bearing borrowings	(4 300)
Trade and other payables	(1 800)
Bank overdraft	(200)

2. Ryder purchased a 60% interest in Roland Ltd on 1 July 2019 for N$3000. On that date, the carrying values of the net identifiable assets approximated their fair values and the Statement of Financial position of Roland indicated the following equity:

Share capital (2500 shares) N$2500

Retained earnings N$2000

On 1 January 2021 a 3rd of this interest was sold for N$1600. On 1 January 2021, the fair value of the remaining investment in Roland Ltd was N$3200 and the carrying amounts of the assets of Roland Ltd were as follows:

ITEM	N$
Property Plant and Equipment	13 000
Receivables	3 000
Bank	400
Inventories	1 500
Interest bearing borrowings	(6 850)
Deferred Tax	(2 600)
Trade and other payables	(1 700)
	6 750

The recoverable amount of goodwill was N$270 on 30 June 2020 and N$255 on 1 January 2021.

3. On 1 July 2020, Ryder entered into a lease agreement. Ryder did not elect the simplified accounting treatment for the equipment. In terms of the agreement, equipment with a cost of N$550 was leased for a period of five years. The interest rate is 10% per annum and instalments are payable annually in arrears on 1 July.

4. The following are, inter alia, included in profit before taxation:

ITEM	N$
Depreciation	3 550
Realized exchange loss on bearing foreign loan	800
Unrealized exchange loss on interest bearing foreign loan	700
Bad Debts Written off	2 200
Impairment of Goodwill	850

5. Ryder invested N$100 in a fixed deposit in the USA on 30 June 2020. At that date, the exchange rate was $1=N$6.90. On 30 June 2021, the exchange rate was $1=N$9.30

6. Accept a tax rate of 30%. Ignore Capital gains tax as it is not applicable in Namibia and ignore VAT

Required: 1.1 Prepare the Consolidated Statement of Cash Flows of Ryder Ltd Group in accordance with the Direct Method, for the year ended 30 June 2021. (40 Marks)