On 1 October 2022 Pally Co acquired 90% of the ordinary shares of Sally Co by...

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On 1 October 2022 Pally Co acquired 90% of the ordinary shares of Sally Co by issuing 100 million shares at an agreed value of $1.60 per share and $140 million in cash. At that time (1.10.2022), the statement of financial position of Sally Co (equivalent to the fair value of the assets and liabilities) was as follows: Property, plant and equipment Inventories Trade receivables Cash and cash equivalents Trade payables $ mil 190 70 30 10 (40) 260 The consolidated statement of financial position of Pally Group as at 31 December were as follows: Assets Non-current assets Property, plant and equipment Goodwill Current assets Inventories Trade Receivables Cash and cash equivalents Equity attributable to owners of the parent Share capital ($ 1 ordinary shares) Share premium Retained earnings Non-controlling interest (NCI) Non-current liabilities Deferred tax Current liabilities Trade payables Current tax 2022 $ mil 2568 60 2628 1450 1370 2 2822 5450 1150 590 1778 3518 32 3550 80 1710 110 1820 5450 2021 $ mil 2300 2300 1200 1100 50 2350 4650 1000 500 1530 3030 3030 40 1520 60 1580 4650 The consolidated statement of comprehensive income of Pally Group for the year ended 31 December 2022 was as follows: Sales Cost of sales GP Admin Expenses Profit before tax Taxation Profit for the year Attributable to: Parent NCI $ mil 10000 -7500 2500 -2083 417 -150 267 258 9 267 Notes: 1. All other subsidiaries (apart from Sally Co) are wholly owned. 2. Depreciation charged to the consolidated statement of comprehensive income amounted to $210 million. 3. There were no disposal or property, plant and equipment during the year. Required: a) Prepare the consolidated statement of cash flows of Pally Group for the year ended 31 December 2022. (Show all your workings such as the T-accounts clearly) b) Briefly comment on the cash flow position of the group. On 1 October 2022 Pally Co acquired 90% of the ordinary shares of Sally Co by issuing 100 million shares at an agreed value of $1.60 per share and $140 million in cash. At that time (1.10.2022), the statement of financial position of Sally Co (equivalent to the fair value of the assets and liabilities) was as follows: Property, plant and equipment Inventories Trade receivables Cash and cash equivalents Trade payables $ mil 190 70 30 10 (40) 260 The consolidated statement of financial position of Pally Group as at 31 December were as follows: Assets Non-current assets Property, plant and equipment Goodwill Current assets Inventories Trade Receivables Cash and cash equivalents Equity attributable to owners of the parent Share capital ($ 1 ordinary shares) Share premium Retained earnings Non-controlling interest (NCI) Non-current liabilities Deferred tax Current liabilities Trade payables Current tax 2022 $ mil 2568 60 2628 1450 1370 2 2822 5450 1150 590 1778 3518 32 3550 80 1710 110 1820 5450 2021 $ mil 2300 2300 1200 1100 50 2350 4650 1000 500 1530 3030 3030 40 1520 60 1580 4650 The consolidated statement of comprehensive income of Pally Group for the year ended 31 December 2022 was as follows: Sales Cost of sales GP Admin Expenses Profit before tax Taxation Profit for the year Attributable to: Parent NCI $ mil 10000 -7500 2500 -2083 417 -150 267 258 9 267 Notes: 1. All other subsidiaries (apart from Sally Co) are wholly owned. 2. Depreciation charged to the consolidated statement of comprehensive income amounted to $210 million. 3. There were no disposal or property, plant and equipment during the year. Required: a) Prepare the consolidated statement of cash flows of Pally Group for the year ended 31 December 2022. (Show all your workings such as the T-accounts clearly) b) Briefly comment on the cash flow position of the group.

Answer rating: 100% (QA)

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