c) You are a financial accountant for Spaghetti plc, a listed group. The financiacontroller has asked you to produce the consolidated statement of cash flows forthe year ended 31 December 2018 and has provided the following information:
(1) Extracts from Spaghetti plc's statement of financial position as at 31 December.

(2) During the year Spaghetti plc disposed of a subsidiary called Artichoke Ltd. The assets of Artichoke Ltd at the date of disposal were:

Non-controlling interest is valued using the fair value method and at the date ofdisposal was valued at f120.000.
(3) During the year ended 31 December 2018 Spaghetti plc:made a profit for the year ofE1,035,000, of which E200,000 was attributableto the non-controlling interest
paid ordinary dividends
sold a machine for E829,000. The cost at acquisition was f1,600,000 and accumulated depreciation E700000charged depreciation of E314,000

(i) As far as the information provided allows, prepare the following extracts fromSpaghetti plc's Consolidated Statement of Cash Flows:
Cash generated from operationsCash flows from financing activities
You should ignore tax for the purposes of this question
(15 marks)
(i)Explain why it is necessary to produce a consolidated statement of cash flows inaddition to the consolidated statement of financial position and consolidatedstatement of profit or loss
(5 marks)

QUESTION 1 (35 marks)

On 1st October 2017, Sugar Limited acquired 90% of Salt limitedby issuing 100 000 shares at an agreed value of N$1.60 per shareand N$ 140 000 in cash.

At that time, the Statement of Financial Position of SaltLimited was as follows:

N$ 000

Property plant and equipment 190

Inventories 70

Trade receivables 30

Cash and cash equivalent 10

Trade payables (40)

Total 260

The Consolidated Statements of Financial Position of SugarLimited as at 31 December were as follows:

2017 2016

N$000 N$ 000

Non-current assets

Property, plant and equipment 2 500 2 300

Goodwill 66 0

Total 2 566 2 300

Current assets

Inventories 1 450 1 200

Trade receivables 1 370 1 100

Cash and cash equivalents 16 50

Total 2 836 2 350

Total Assets 5 402 4 650

Equity attributable to equity holders of the parent

Share capital (N$ 1 ordinary share) 1 150 1 000

Share premium account 590 500

Retained earnings 1 791 1 530

3 531 3 030

Non- controlling interest 31 0

3 562 3 030

Current liabilities

Trade payables 1 690 1 520

Income tax payable 150 100

1 840 1 620

Total equity and liabilities 5 402 4 650

The Consolidated Statement of Profit or Loss for the year ended31 December 2017 was as follows:

Revenue 10 000

Cost of sales (7 500)

Gross profit 2 500

Administrative expenses (2 080)

Profit before tax 420

Income tax expense (150)

Profit for the period 270

Attributable to:

Equity holders of the parent 261

Non- controlling interest 9

270

You are also given the following information:

1. All the subsidiary are wholly owned

2. Depreciation charged to the consolidated income statementamounted to

N$210 000

3. There were no disposals of property, plant and equipmentduring the year

4. No dividend were paid by the parent company

Required

Prepare a Consolidated Statement of Cash flows for the yearended 31 December 2017 under the indirect method in accordance withIAS 7. (35 marks)

On 1st October 2017, Sugar Limited acquired 90% of Salt limitedby issuing 100 000 shares at an agreed value of N$1.60 per shareand N$ 140 000 in cash.
At that time, the Statement of Financial Position of Salt Limitedwas as follows:
N$ 000
Property plant and equipment 190
Inventories 70
Trade receivables 30
Cash and cash equivalent 10
Trade payables (40)
260
The Consolidated Statements of Financial Position of Sugar Limitedas at 31 December were as follows:
2017 2016
N$000 N$ 000
Non-current assets
Property, plant and equipment 2 500 2 300
Goodwill 66 0
Total 2 566 2 300
Current assets
Inventories 1 450 1 200
Trade receivables 1 370 1 100
Cash and cash equivalents 16 50
2 836 2 350 Total Assets 5 402 4 650

Equity attributable to equity holders of the parent
Share capital (N$ 1 ordinary share) 1 150 1 000
Share premium account 590 500
Retained earnings 1 791 1 530 Total 3 531 3 030
Non- controlling interest 31 0
Total 3 562 3 030
Current liabilities
Trade payables 1 690 1 520
Income tax payable 150 100
Total Current 1 840 1 620
Total equity and liabilities 5 402 4 650
The Consolidated Statement of Profit or Loss for the year ended 31December 2017 was as follows:
Revenue 10 000
Cost of sales (7 500)
Gross profit 2 500
Administrative expenses (2 080)
Profit before tax 420
Income tax expense (150)
Profit for the period 270
Attributable to:
Equity holders of the parent 261
Non- controlling interest 9
270
You are also given the following information:

1. All the subsidiary are wholly owned
2. Depreciation charged to the consolidated income statementamounted to
N$210 000
3. There were no disposals of property, plant and equipment duringthe year
4. No dividend were paid by the parent company
Required
Prepare a Consolidated Statement of Cash flows for the year ended31 December 2017 under the indirect method in accordance with IAS7. (35 marks)

QUESTION 1 (35 marks)
On 1st October 2017, Sugar Limited acquired 90% of Salt limited byissuing 100 000 shares at an agreed value of N$1.60 per share andN$ 140 000 in cash.
At that time, the Statement of Financial Position of Salt Limitedwas as follows:
N$ 000
Property plant and equipment 190
Inventories 70
Trade receivables 30
Cash and cash equivalent 10
Trade payables (40)
260
The Consolidated Statements of Financial Position of Sugar Limitedas at 31 December were as follows:
2017 2016
N$000 N$ 000
Non-current assets
Property, plant and equipment 2 500 2 300
Goodwill 66 0
2 566 2 300
Current assets
Inventories 1 450 1 200
Trade receivables 1 370 1 100
Cash and cash equivalents 16 50
2 836 2 350 Total Assets 5 402 4 650
13
Equity attributable to equity holders of the parent
Share capital (N$ 1 ordinary share) 1 150 1 000
Share premium account 590 500
Retained earnings 1 791 1 530 3 531 3 030
Non- controlling interest 31 0
3 562 3 030
Current liabilities
Trade payables 1 690 1 520
Income tax payable 150 100
1 840 1 620
Total equity and liabilities 5 402 4 650
The Consolidated Statement of Profit or Loss for the year ended 31December 2017 was as follows:
Revenue 10 000
Cost of sales (7 500)
Gross profit 2 500
Administrative expenses (2 080)
Profit before tax 420
Income tax expense (150)
Profit for the period 270
Attributable to:
Equity holders of the parent 261
Non- controlling interest 9
270
You are also given the following information:
14
1. All the subsidiary are wholly owned
2. Depreciation charged to the consolidated income statementamounted to
N$210 000
3. There were no disposals of property, plant and equipment duringthe year
4. No dividend were paid by the parent company
Required
Prepare a Consolidated Statement of Cash flows for the year ended31 December 2017 under the indirect method in accordance with IAS7. (35 marks)

The following information was derived from the 2017 consolidated financial statements of Lime Inc., which owns 80% of Lemon Inc. as well as 40% of Zinc Inc.:

The cash balance at the start of 2017 was $200,000.

Required:

Prepare the consolidated statement of cash flows for Lime Inc. for the year ended December 31, 2017.