MGT6153 FINANCIAL ACCOUNTING & FINANCIAL STATEMENTS ANALYSIS
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MGT6153 FINANCIAL ACCOUNTING & FINANCIAL STATEMENTS ANALYSIS
TUTORIAL 6 QUESTIONS
Question 1
The following information is available for Castleton plc:
Income Statement for the year ended 31st December
Net operating profit
Interest received
Interest paid
Profit before tax
Taxation
Profit after tax
Preference dividends paid Ordinary dividends paid Retained profit for the year Retained profit at start of year Redemption of preference shares Retained profit at end of year
2017
£
136,200
5,000
10,000
131,200
21,000
110,200
10,000
60,000
40,200
212,560
252,760
2018
£
93,180
24,000
10,000
|
107,180 25,000 |
|
82,180 10,000 60,000 |
|
12,180 252,760 220,000 |
|
44,940 |
Statement of Financial Position as at 31st December 2018
Non-Current assets
Land &buildings
Equipment & fittings
Current Assets
Inventory
Trade receivables
Bank
TOTAL ASSETS
Equity & Liabilities
Ordinary Shares of £1.00 each Preference Shares of £1.00 each Share Premium
Capital redemption reserve
Revaluation reserve
Retained earnings
Non-current liabilities
2017
£ £
|
164,800 108,600 254,200 |
1,086,200
1,473,100
527,600 2,000,700
1,200,000 200,000 |
100,000 252,760 1,752,760
2018 £
166,800
97,500
3,000
£
1,249,000
404,600
1,653,600
267,300
1,920,900
1,240,000
80,000
200,000
140,000
44,940
1,704,940
10% Debentures
Current Liabilities
Trade payables
Taxation
TOTAL EQUITY &
LIABILITIES
126,940
21,000
100,000
247,940
2,000,700
90,960
25,000
100,000
215,960
1,920,900
The following additional information is also available:
(i) An issue of ordinary shares was made on 1 January 2018 at £3 per share. (ii) In December 2018, all ofthe preference shares were redeemed at a premium
of 10% of their nominal value using available cash resources.
(iii) The land and buildings were revalued during the year causing the change in
the revaluation reserve. Buildings costing £200,000 had been purchased during the year. There were no disposals of land or buildings during the year. It is company policy to depreciate buildings but not to depreciate the cost of land.
(iv) New equipment and fittings costing £122,700 had been purchased during the
year.
(v) During the year equipment and fittings, which had originally been purchased for £130,400 and had accumulated depreciation of £75,400, was sold for cash proceeds of £35,800. The difference on disposal had been taken to the profit and loss account together with the depreciation charge on other equipment and fittings.
Required:
Prepare the statement of cash flows for the year ended 31 December 2018 using indirect method.
Question 2
The Statement of Financial Position of Treat PLC for year ended 31 December are shown below:
|
|
2017 |
2018 |
|
|
|
£000 |
£000 |
|
|
Non-current assets |
|
|
|
|
Freehold land at valuation |
1,000 |
2,550 |
|
|
Equipment at cost |
2,600 |
3,850 |
|
|
Equipment: Accumulated depreciation |
(1,080) |
(1,660) |
|
|
|
2,520 |
4,740 |
|
|
Current Assets |
|
|
|
|
Inventory |
800 |
950 |
|
|
Trade receivables |
1,100 |
1,050 |
|
|
|
1,900 |
2,000 |
|
|
TOTAL ASSETS |
4,420 |
6,740 |
|
|
Equity & Liabilities |
|
|
|
|
Ordinary Shares of £1.00 each |
1,000 |
1,500 |
|
|
Share Premium |
|
750 |
|
|
Revaluation Reserve |
|
550 |
|
|
Retained earnings |
2,045 |
|
00 |
|
Total Capital |
3,045 |
5,000 |
|
|
Non-current liabilities Long term loan |
600 |
400 |
|
|
Current Liabilities |
|
|
|
|
Taxation |
75 |
125 |
|
|
Trade Payables |
650 |
1,000 |
|
|
Bank overdraft |
50 |
215 |
|
|
|
775 |
1,340 |
|
|
TOTAL EQUITY & LIABILITIES |
|
6,740 |
|
The summarised Income Statement for the year ended 31 December 2018 was:
|
|
£000 |
|
Operating profit |
500 |
|
Interest paid |
70 |
|
Profit before tax |
430 |
|
Taxation |
125 |
|
Profit after tax |
305 |
2022-01-17