CLOSED BOOK

SECTION A – ANSWER THE QUESTIONS

Question one
The following summarised statements of financial position relate to the VINAMILK
group of companies as at 31st August 2019.
VINA plc MILK Ltd

Non-Current Assets £’ 000 £’ 000

Tangible Assets 40,000 12,000
Investment in MILK 12,000

Current Assets
Inventory 5,600 1,500
Receivables 3,000 400
Cash 2,000 100
Total Assets 62,600 14,000

Equity and Liabilities

Equity
Share Capital (£1 par) 45,000 9,500
Retained Earnings 10,200 1,500
55,200 11,000
Current Liabilities
Payables 7,400 3,000

Total Equity and Liabilities 62,600 14,000

Additional Information
1. Vina plc purchased 7,500,000 shares in Milk Ltd on 1st September 2018, when
Milk’s retained earnings balance was £ 1,000,000.
2. During the year Milk Ltd sold goods to Vina plc, the profit being to Milk Ltd as
30% of the selling price. At the end of the period £200,000 of these goods
remained in inventories.
3. An annual impairment review took place and you are informed that you need to
write off an impairment loss on goodwill of £ 500,000.
4. The Vinamilk group has the policy to value the non-controlling interest at its fair
value. The fair value was given as £ 2,300,000.
Note: round figures to whole numbers
Required:
a. Prepare the consolidated statement of financial position for the VINAMILK
Group for the year ended 31st August 2019. (20 marks)

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 TOTAL 25 Marks
SECTION B – ANSWER THE QUESTION

Question Two

As financial accountant for EVERON plc, you are responsible for the preparation of a
cashflow statement for the year ended 31st August 2020.

The following information is available:

Statement of Financial Position for EVERON plc as at 31st August 2020

2020 2019

£m £m £m £m
Non-Current Assets
Tangible Assets 5,000 4,500
Current Assets
Inventory 2,000 2,200
Receivables 900 1,400
Cash at bank 1,500 --
4,400 3,600
Total Assets 9,400 8,100
Equity and Liabilities
Ordinary £1 shares 4,900 4,000
Retained Earnings 2,200 1,600
7,100 5,600
Non-Current Liabilities
Long term loan 1,600 1,900
Current Liabilities
Payables 700 600
Total Equity and Liabilities 9,400 8,100

Statement of Profit or loss for EVERON plc for the year ended 31st August 2020

£m
Sales 10,000
Cost of sales (5,500)
Gross Profit 4,500
Distribution costs (1,200)
Administrative expenses (1,000)
Operating profit 2,300
Interest payable (100)
Profit before taxation 2,200
1
Taxation (440)
Profit after taxation 1,760

Dividends paid in the period 1,160

1. Tangible assets

Tangible assets held by EVERON plc are items of plant and machinery and freehold
premises. During the year to 31st August 2020 items of plant and machinery which
originally cost £ 800 m were disposed of, resulting in a profit of £150 m. These items
had a carrying value of £ 600 m at the date of disposal.

2. Payables

The total payables figure breaks down as follows:

2020 2019
£m £m
Bank overdraft - 50
Trade payables 350 300
Interest payable 160 110
Current tax payable 190 140

3. Depreciation

The depreciation charge for the year, included in the income statement was £ 500 m.

Required:

a) Draw up a Cash Flow Statement, using the indirect method, in accordance

with IAS7.
(20 marks)

END OF PAPER