Page 14 - 27. COMPILER QB - IND AS 7

Q10 (May 20 – 10 Marks)

Entity A acquired a subsidiary, entity B, during the year. Summarised information from the consolidated
statement of profit and loss and balance sheet is provided, together with some supplementary information.
Consolidated statement of profit and loss Amount (Rs.)
Revenue 3,80,000
Cost of sales (2,20,000)
Gross profit 1,60,000
Depreciation (30,000)
Other operating expenses (56,000)
Interest cost (4,000)
Profit before taxation 70,000
Taxation (15,000)
Profit after taxation 55,000

Consolidated balance sheet 20X2 20X1

Amount (Rs.) Amount (Rs.)
Assets
Cash and cash equivalents 8,000 5,000
Trade receivables 54,000 50,000
Inventories 30,000 35,000
Property, plant and equipment 1,60,000 80,000
Goodwill 18,000 —
Total assets 2,70,000 1,70,000
Liabilities
Trade payables 68,000 60,000
Income tax payable 12,000 11,000
Long term debt 1,00,000 64,000
Total liabilities 1,80,000 1,35,000
Shareholders‖ equity 90,000 35,000
Total liabilities and shareholders’ 2,70,000 1,70,000

Other information
All of the shares of entity B were acquired for Rs. 74,000 in cash. The fair values of assets acquired and
liabilities assumed were:

Particulars Amount (Rs.)
Inventories 4,000
Trade receivables 8,000
Cash 2,000
Property, plant and equipment 1,10,000
Trade payables (32,000)
Long term debt (36,000)
Goodwill 18,000
Cash consideration paid 74,000
Prepare statement of cash flows of Entity A.

27. 13