Extracts from the consolidated financial statements of PolyCom Limited for the year December 2017 are given...

   

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Extracts from the consolidated financial statements of PolyCom Limited for the year December 2017 are given below: Consolidated statement of profit and loss of Poly Com Limited for the year ended 31 December 2017 ACT B407 (1715) Revenue Cost of sales Gross profit Distribution costs Administrative expenses Share of associates' profits (net of tax) Interest expense Profit before tax Income tax Profit after tax Attributable to: Owners of the parent Non-controlling interests $000 180,000 (119,500) 60,500 (7,000) (11,000) 290 (2,800) 39,990 (12,500) 27,490 ended 31 25,660 1,830 27,490 Page 8 of 11 Assets Property, plant and equipment Goodwill Investment in associates Inventories Accounts receivable Bank Consolidated statements of financial position as at 31 December 2017 $000 Equity and liabilities Ordinary shares Retained profits Non-controlling interest Trade payables Interest payables Tax payables Long-term bank loans 1. 2. 3. 105,700 9,120 1,200 65,800 54,260 3,740 239,820 64,400 52,190 5,230 66,680 2,720 12,200 36,400 239,820 2016 $000 88,100 8,320 960 The following information is available: There were no disposals of non-current assets during the year of 2017. Depreciation of $15,900,000 was included in the cost of sales in arriving at the profits for the year ended 31 December 2017. 56,540 52,600 7,800 214,320 56,000 36,680 3,840 65,620 2,880 10,900 38,400 214,320 Dividend paid by PolyCom Limited during the year amounted to $10,150,000. On 1 January 2017, PolyCom Limited acquired 80% of the issued ordinary shares of Excele Limited. The purchase consideration was settled by issue of 4 million of its own ordinary shares plus $400,000 cash. PolyCom Limited's shares are traded at $2.1 per share at the date of acquisition. The net assets of Excele Limited at the date of acquisition were assessed as having the following fair values: Property, plant and equipment (net) Inventories Trade receivables Bank Trade payables Tax payables Required: $000 8,400 3,300 2,600 100 (3,900) (500) 10,000 (a) Prepare a consolidated statement of cash flows for PolyCom Limited for (20 marks) the year ended 31 December 2017 in accordance with HKAS 7 Statement of Cash Flows, using the indirect method to calculate cash flows from operating activities. (b) Based on your answer in part (a), briefly comment on the cash flow (5 marks) positions of Poly Com Limited. Extracts from the consolidated financial statements of PolyCom Limited for the year December 2017 are given below: Consolidated statement of profit and loss of Poly Com Limited for the year ended 31 December 2017 ACT B407 (1715) Revenue Cost of sales Gross profit Distribution costs Administrative expenses Share of associates' profits (net of tax) Interest expense Profit before tax Income tax Profit after tax Attributable to: Owners of the parent Non-controlling interests $000 180,000 (119,500) 60,500 (7,000) (11,000) 290 (2,800) 39,990 (12,500) 27,490 ended 31 25,660 1,830 27,490 Page 8 of 11 Assets Property, plant and equipment Goodwill Investment in associates Inventories Accounts receivable Bank Consolidated statements of financial position as at 31 December 2017 $000 Equity and liabilities Ordinary shares Retained profits Non-controlling interest Trade payables Interest payables Tax payables Long-term bank loans 1. 2. 3. 105,700 9,120 1,200 65,800 54,260 3,740 239,820 64,400 52,190 5,230 66,680 2,720 12,200 36,400 239,820 2016 $000 88,100 8,320 960 The following information is available: There were no disposals of non-current assets during the year of 2017. Depreciation of $15,900,000 was included in the cost of sales in arriving at the profits for the year ended 31 December 2017. 56,540 52,600 7,800 214,320 56,000 36,680 3,840 65,620 2,880 10,900 38,400 214,320 Dividend paid by PolyCom Limited during the year amounted to $10,150,000. On 1 January 2017, PolyCom Limited acquired 80% of the issued ordinary shares of Excele Limited. The purchase consideration was settled by issue of 4 million of its own ordinary shares plus $400,000 cash. PolyCom Limited's shares are traded at $2.1 per share at the date of acquisition. The net assets of Excele Limited at the date of acquisition were assessed as having the following fair values: Property, plant and equipment (net) Inventories Trade receivables Bank Trade payables Tax payables Required: $000 8,400 3,300 2,600 100 (3,900) (500) 10,000 (a) Prepare a consolidated statement of cash flows for PolyCom Limited for (20 marks) the year ended 31 December 2017 in accordance with HKAS 7 Statement of Cash Flows, using the indirect method to calculate cash flows from operating activities. (b) Based on your answer in part (a), briefly comment on the cash flow (5 marks) positions of Poly Com Limited.

Answer rating: 100% (QA)

Operating Activities Profit Before Tax 39990 Adjustments for NonCash Items Depreciation Included in Cost of Sales 15900 Share of Associates Profits Ne... View the full answer