QUESTION $2(39$ marks$)$

Roundworm Ltd is a group of companies with a $31$ December year$-$end. The Roundworm group financial

statements for the years $20\mathrm{.}21$ and $20\mathrm{.}22$ are given below:

Roundworm Group Ltd

Consolidated statement of comprehensive income for the year ended $31$ December $20\mathrm{.}22$

$($Extract$)$

R

Revenue $600000000$

Cost of sales $(300000000)$

Gross profit $300000000$

Operating expenses $(150000000)$

Finance costs $(44000000)$

Share of profits from associate $17000000$

Profit before tax $123000000$

Taxation $(35000000)$

$88000000$

Other comprehensive income: Gain on revaluation of PPE $15000000$

$103000000$

Profit attributable to:

$-$ Non$-$controlling interests $10000000$

$-$ Parent shareholders $78000000$

$88000000$

Total comprehensible income attributable to:

$-$ Non$-$controlling interest $12000000$

$-$ Parent shareholders $91000000$

$103000000$

Roundworm Group Ltd

Consolidated statement of financial position as at $31$ December $20\mathrm{.}21$ and $20\mathrm{.}22($Extract$)$

$20\mathrm{.}2220\mathrm{.}21$

ASSETS R R

Non$-$Current Assets

$-$ Property, plant and equipment $240000000280000000$

$-$ Investments in associates $8000000070000000$

$-$ Goodwill $2500000019000000$

$345000000369000000$

Current Assets

$-$ Inventory $10500000090000000$

$-$ Receivables $120000000100000000$

$-$ Cash and cash equivalents $3000000075000000$

$255000000265000000$

TOTAL ASSETS $600000000634000000$

EQUITY AND LIABILITIES

Equity

$-$ Share capital $100000000100000000$

$-$ Retained earnings $194000000142000000$

$-$ Revaluation reserve $10300000090000000$

$-$ Non$-$controlling reserve $7200000040000000$

Total Equity $469000000372000000$

Non$-$current Liabilities

$-12\%$ debentures $90000000$

$-$ Deferred taxation $3000000024000000$

Total Non$-$current Liabilities $30000000114000000$

Current Liabilities

$-$ Trade payables $6500000055000000$

$-$ Taxation $100000008000000$

$-$ Bank overdraft $2600000085000000$

Total Current Liabilities $101000000148000000$

Total Liabilities $131000000262000000$

TOTAL EQUITY AND LIABILITIES $600000000634000000$

Additional information:

$1.$ Acquisition of subsidiary

During the year ended $31$ December $20\mathrm{.}22,$ Roundworm purchased $80\%$ of the issued equity

share capital of Chong Ltd for R$100000000,$ payable in cash. The net assets of Chong at the

date of acquisition were assessed at fair value as follows:

R

Property, plant and equipment $60000000$

Inventory $30000000$

Receivables $25000000$

Bank and cash $10000000$

Trade payables $(15000000)$

Taxation $(5000000)$

$105000000$

It is group policy to measure NCI at the proportionate share of the fair value of net assets

at acquisition.

$2.$ Goodwill

Goodwill suffered an impairment during the year.

$3.$ Property, plant and equipment

The only disposal in the year was of land with a carrying value of R$90$ million. The

profit on disposal of R$10$m is included within operating expenses. Depreciation of

R$58$m was charged on PPE in the year.

REQUIRED: QUESTION $2$ Marks

Prepare the Consolidated Statement of Cash Flows for Ringworm

Group for the year ended $31$ December $20\mathrm{.}22$ using the direct method.

Show your workings using T$-$accounts.

Total marks for question $2$

$20$

Your answer should comply with the requirements of International

Financial Reporting Standards $($IFRS$$s$).$