CAT 1

QUESTION ONE

WEWE LTD
STATEMENT CASH FLOW
FOR YEAR ENDED 31 MARCH 2018
SH.’000’ SH.’000’
Cash from operating activities
Net profit before tax and extraordinary items 2,400
Adjustments for:
Depreciation 1,150
Goodwill written off 420
Gain on sale of plant (720)
Gain on sale of investment (160) 690
Operating profit before working capital 3,090
changes (1,350)
Interest in stock 1,660
Decrease in accounts payable 600
Increase in accounts payable (870) 40
Increase in investments 3,130
Cash generated from operations (680)
Tax paid 2,450
Net cash from operating activities
Cash from investing activities 1,470
Sale of plant 310
Sale of investments (300)
Acquisition of land and building (320)
Goodwill purchased (1,410)
Acquisition of plant and machinery (250)
Net cash flow from investing activities
Cash from financing activities 3,750
Issue of share at a premium (1,500)
Debenture redemption (530)
Dividends paid 1,720
Net cash flow from 3,920
Net cash inflow increase for the year (5,270)
Cash/cash equivalents as at 1.4.2017
Cash/cash equivalents as at 31.3.2018 (1,350)
3,920
Workings:
 1. Plant/machinery
Sh.’000’ Sh.’000’
Bal b/f 6,350 Disposal 750
Bank 1,410 Depreciation 1,150
____ Bal c/f 5,860
7,760 7,760

2. Goodwill
Sh.’000’ Sh.’000’
Bal Bal b/f 2,900 P & L 420
Bank 320 Bal c/f 2,800
3,220 3,220

QUESTION TWO

MASABA COMPANY LTD

APPROPRIATION ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2018
Shs’000 Shs’000
Net profit for the year 1,440
Retained profit as at 1.1.2018 4,460
5,900
Transfer to general reserve 500
Preference dividend 400
Ordinary share dividends 600
Bonus issue 2,000 (3,500)
Retained profit c/f 2,400

MASABA LTD
BALANCE SHEET
AS AT 31ST DECEMBER 2018
Shs’000 Shs’000 Shs’000
Non-current assets
Land & buildings 18,400
Motor vehicle 4,200
Fittings 1,500
Intangible asset: goodwill 1,200

Current assets
Debtor 1,660
Short term investment 780
Stock _2,960 _5,400
Total assets 30,700

Equity and liabilities

Capital:
Issued share capital 600,000@Sh.20 ordinary share 12,000
Bonus issue 100,000@Sh.20 ordinary share _2,000 14,000
Issued share capital 250,000 Sh.20 Redeemable Preference 5,000
shares
Share premium 400
Capital redemption reserve fund 3,000
General reserve 1,600
Revaluation Reserve 1,000
Retained profits balance c/f _2,400
27,400

Non-current liability
10% Debenture 1,600

Current liabilities
Creditors 960
Bank overdraft 540
Outstanding preference interim dividend __200
Total equity and liabilities 30,700