QUESTION $2(39$ marks$)$

Roundworm Ltd is a group of companies with a $31$ December year$-$end. The Roundworm group financial statements for the years $20\mathrm{.}21$ and $20\mathrm{.}22$ are given below:

Roundworm Group Ltd

Consolidated statement of comprehensive income for the year ended $31$ December $20\mathrm{.}22($Extract$)$

R

Revenue

$600000000$

Cost of sales

$(300000000)$

Gross profit

$300000000$

Operating expenses

$(150000000)$

Finance costs

$(44000000)$

Share of profits from associate

$17000000$

Profit before tax

$123000000$

Taxation

$(35000000)$

$88000000$

Other comprehensive income: Gain on revaluation of PPE

$15000000$

$103000000$

Profit attributable to:

$-$

Non$-$controlling interests

$10000000$

$-$

Parent shareholders

$78000000$

$88000000$

Total comprehensible income attributable to:

$-$

Non$-$controlling interest

$12000000$

$-$

Parent shareholders

$91000000$

$103000000$

Roundworm Group Ltd

Consolidated statement of financial position as at $31$ December $20\mathrm{.}21$ and $20\mathrm{.}22($Extract$)$

$20\mathrm{.}22$

$20\mathrm{.}21$

ASSETS

R

R

Non$-$Current Assets

$-$

Property, plant and equipment

$240000000$

$280000000$

$-$

Investments in associates

$80000000$

$70000000$

$-$

Goodwill

$25000000$

$19000000$

$345000000$

$369000000$

Current Assets

$-$

Inventory

$105000000$

$90000000$

$-$

Receivables

$120000000$

$100000000$

$-$

Cash and cash equivalents

$30000000$

$75000000$

$255000000$

$265000000$

TOTAL ASSETS

$600000000$

$634000000$

EQUITY AND LIABILITIES

Equity

$-$

Share capital

$100000000$

$100000000$

$-$

Retained earnings

$194000000$

$142000000$

$-$

Revaluation reserve

$103000000$

$90000000$

$-$

Non$-$controlling reserve

$72000000$

$40000000$

Total Equity

$469000000$

$372000000$

Non$-$current Liabilities

$-$

$12\%$ debentures

$90000000$

$-$

Deferred taxation

$30000000$

$24000000$

Total Non$-$current Liabilities

$30000000$

$114000000$

Current Liabilities

$-$

Trade payables

$65000000$

$55000000$

$-$

Taxation

$10000000$

$8000000$

$-$

Bank overdraft

$26000000$

$85000000$

Total Current Liabilities

$101000000$

$148000000$

Total Liabilities

$131000000$

$262000000$

TOTAL EQUITY AND LIABILITIES

$600000000$

$634000000$

Additional information:

$1.$

Acquisition of subsidiary

During the year ended $31$ December $20\mathrm{.}22,$ Roundworm purchased $80\%$ of the issued equity share capital of Chong Ltd for R$100000000,$ payable in cash. The net assets of Chong at the date of acquisition were assessed at fair value as follows:

R

Property, plant and equipment

$60000000$

Inventory

$30000000$

Receivables

$25000000$

Bank and cash

$10000000$

Trade payables

$(15000000)$

Taxation

$(5000000)$

$105000000$

It is group policy to measure NCI at the proportionate share of the fair value of net assets

at acquisition.

$2.$

Goodwill

Goodwill suffered an impairment during the year.

$3.$

Property, plant and equipment

The only disposal in the year was of land with a carrying value of R$90$ million. The

profit on disposal of R$10$m is included within operating expenses. Depreciation of

R$58$m was charged on PPE in the year.

REQUIRED: QUESTION $2$

Marks

Prepare the Consolidated Statement of Cash Flows for Ringworm Group for the year ended $31$ December $20\mathrm{.}22$ using the direct method.

Show your workings using T$-$accounts.

Total marks for question $2$

$20$

Your answer should comply with the requirements of International Financial Reporting Standards $($IFRS$$s$).$