Scribd
Upload
6 views3 pages

Financial Management

The document provides financial data and questions related to ABC's financial statements for the year ending March 31, 2009, including administrative expenses, sales, and various asset valuations. It also includes exercises on earnings per share calculations, financial instruments, and cash flow statements in accordance with IAS standards. Additionally, it outlines the necessary adjustments and journal entries required for accurate financial reporting.

Uploaded by

Kingsley Mweemba
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
6 views3 pages

Financial Management

The document provides financial data and questions related to ABC's financial statements for the year ending March 31, 2009, including administrative expenses, sales, and various asset valuations. It also includes exercises on earnings per share calculations, financial instruments, and cash flow statements in accordance with IAS standards. Additionally, it outlines the necessary adjustments and journal entries required for accurate financial reporting.

Uploaded by

Kingsley Mweemba
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

Class Examples BAF311/BAC361

Question IAS 1
The following information has been extracted from the books of ABC for the year to 31 March 2009.
Dr. Cr.

Administrative expenses 680,000


Interest paid 20,000
Called up share capital (ordinary shares of 800,000
Dividend 24,000
Cash at back and in hand 36,000
Income tax 40,000
Warranty provision 360,000
Distribution costs 960,000
Land and buildings:
At cost (Land K 440,000, Buildings K400, 000) 840,000
Accumulated depreciation (at 1 April 20X8 192,000
Plant and machinery:
At cost 500,000
Accumulated depreciation (at 1 April 20X8 300,000
Retained earnings (at 1 April 20X8) 1,080,000
10% Loan 320,000
Purchases 1,880,000
Sales 5,200,000
Inventory (at 1 April 20X8) 600,000
Trade payables 240,000
Trade receivables 2,912,000
8,492,000
8,492,000
Additional Information
(1) Inventory at 31 March 20X9 was valued at K1000, 000.
(2) Buildings and plant and machinery are depreciated on a straight-line basis (assuming no residual
value) at the following rates:
On cost: Buildings 5%
Plant and machinery 20%
(3) There were no purchases or sales of non-current assets during the year to 31 March 20X9.
(4) The depreciation charges for the year to 31 March 20X9 are to be apportioned as follows:
Cost of sales 60%
Distribution costs 20%
Administrative Expenses 20%
(5) Income taxes is for the year to 31 March 20X9 (at a rate of 30%) are estimated to be K540, 000.
(6) The loan is repayable in five years.
(7) The year end provision for warranty claims has been estimated at K300, 000. Warranty costs are
charged to administrative expenses.
i)Prepare adjusting journals for the notes
ii)Prepare ABCplc’s Income statement for the year to 31 March 2009 and a statement of financial position as at that date
in accordance with the requirements of International Accounting Standards IAS 1
iii)Prepare closing entries for question

Page 1 of 3
Question two
EARNINGS PER SHARE
1.During the year ending December 2015 Zambia sugar made a profit after tax of K25, 000. It had 10,000 ordinary
shares on issue .Its preference shares orders are entitled to the 10% of the profit.
Calculate the Basic EPS
2. On 1 January 2013, Shoprite s issued share capital consisted on 50,000 ordinary K1 shares. On 1 March 2013, the
company issued 20,000 ordinary shares. On 1 October 2013, the company bought back 5,000 ordinary shares. Both
the share issue and the buy-back were made at full market price. Calculate the weighted average number of
ordinary share outstanding in the year to 31 December 2013.
3 A company’s profit after tax for the year to 31 December 2014 was K19, 000. The comparative figure for the year
to 31 December 2013 was K18, 000.
The company’s issued share capital at 1 January 2012 consisted of 5000 ordinary shares of 50n. No shares were
issued during the year to 31 December 2013 but a further Million ordinary shares were issued (at full market price)
on 1 April 2014. Calculate basic EPS for the years to 31 December 2013 and 2014.
4. A company’s profit after tax for the year to 31 December 2014 was K2, 000. The comparative figure for the year
to 31 December 2013 was K1; 800.The Company’s issued share capital at 1 January 2013 had of 8000 ordinary
shares. No shares were issued during the year to 31 December 2013 but a 1 for 5 bonus issue was made on 1 March
2014. Calculate basic EPS for the year to 31 December 2014 and the restated comparative figure for the year
to 31 December 2013.
5. A company’s profit after tax for the year to 31 December 2014 was k475, 500. The comparative figure for the
year to 31 December was K144, 000. The company’s issued share capital at 1 January 2013 consisted of 100,000
shares. No shares were issue during the year to 31 December 2013 but a 1 for 2 rights issue was made on 1 May
2014 at 0.3n per share and this was fully subscribed. The market value of the company’s shares just before the
rights issue was 0.5n per share.
Calculate basic EPS for the year to 31 December 2014 and the restated comparative figure for the year to 31
December 2013.

Financial Instruments
1.On January 1 2008 NAPSA borrowed by Purchasing K10, 000 of 8% bonds, interest is payable semi-
annually, and matures in six year s with the 10% effective rate.
a) What is the price (value) of this bond?
b) State if this bond is selling at discount or premium.
C) Show the journal entry to record the initial debt
d) Using the effective interest method calculate the amount that will be shown in the income
Statement and in the statement of financial position over the 6 year period
e) Show the journal entry for (d) above
2.A company issues 2% convertible bonds at their nominal value of K36, 000.
The bonds are convertible at any time up to maturity into 120 ordinary shares for each K100 of bond.
Alternatively the bonds will be redeemed at par after 3 years.
Similar non-convertible bonds would carry an interest rate of 9%.
What amounts will be shown as a financial liability and as equity when the convertible bonds are
issued?
What amounts will be shown in the income statement and statement of financial position for years
1 – 3?

Page 2 of 3
Question 3. Cash flow –IAS7
Comparative statement of financial position for ABZ as at 31 December 2014
Assets 2014 2013
Non –Current assets K K
Property plant and Equipment 976 940
Investments 500 500
1,476 1,440

Current assets 462 424


Trade receivables 280 314
Cash and bank 30 0
772 738
Total assets 2,248 2,178

Equity
Share capital 440 400
Share premium 140 120
Retained earnings 1,052 890
1,632 1,410
Liabilities
Long term loans 180 260

Trade payables 364 352


Accrued interest payable 6 0
Taxation 66 110
Bank overdraft 0 46
2,248 2,178

Income statement for the period ending 31 December 2014


Revenue 1,504
Cost of sales (774)
Gross profit 730
Administration expenses (450)
Interest payable (36)
Dividends received 44
Profit before tax 288
Taxation (66)
Profit after tax 222
The following information is also available
a) Administration expenses include employee salaries of K296 and equipment depreciation of K140.
b) There were no non –current asset disposals during the year to 31 December 2014
c) A dividend of K 60 was paid in March 2014
Prepare the cash flow statement using the indirect method as prescribed by IAS 7
Prepare the cash flow from operating activities using the direct method as prescribed by IAS 7

Page 3 of 3

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy