Task 1:

At 1 January 20X8 Artichoke Co had 5 million $1 equity shares in issue. On 1 June

20X8, it made a 1 for 5 rights issue at a price of $1.5. The market price of the shares
on the last day of quotation with rights was $1.8. Total earnings for the year ended
31 Dec 20X8 was $7.6 million. What is the EPS for the year ended 31 Dec 20X8?

Task 2:
A company has the following assets, earnings and share capital.
20X2 20X1

Assets $100,000 $100,000

Earnings $20,000 $20,000

Shares 200,000 100,000

On 1 July 20X2 the company makes a bonus issue on a 1:1 basis. Calculate basic
EPS for 20X2 and restated EPS for 20X1.

Task 3:
A company has the following assets, earnings and share capital.
20X2 20X1

Assets $100,000 $100,000

Earnings $20,000 $20,000

Shares 150,000 100,000

On 1 July 20X2 the company makes a right issue on a 1:2 basis. Right issue on 1:2
basis at $1.5. Share price before right issue is $2. Calculate basic EPS for 20X2 and
restated EPS for 20X1.

Task 4:
On 1 January 20X1 Saunders Co had 2,000,000 ordinary shares in issue.
On 30 April 20X1 the company issued at full market price, 270,000 ordinary shares.
On 31 July 20X1 the company made a rights issue of 1 for 10 at a rights price of
$2.00. The fair value of the shares on the last day before the issue of shares from
the rights issue was $3.10.
Finally, on 30 September 20X1 the company made a 1 for 20 bonus issue.
Profit for the year was $400,000. The reported EPS for year ended 31 December
20X0 was 18.6c.
Calculate the EPS for year ended 31 December 20X1 and the restated EPS for year
ended 31 December 20X0.
Task 5:
Property at cost (useful life 15 years) : $45 million
Accumulated depreciation : $6 million
On 1 Apr 20X4 Dune Co decided to sell the property. The property is being marketed
by a property agent at a price of $42 million, which was considered a reasonably
achievable price at that date. The expected costs to sell have been agreed at $1
million. Recent market transactions suggest that actual selling prices achieved for
this type of property in the current market conditions are 10% less than the price at
which they are marketed.
At 30 Sep 20X4 the property has not been sold.
At what amount should the property be reported in Dune Co’s SOFP at 30 Sep
20X4?

Task 6:
Brea plc, which has a financial year end of 31 December, has an item of plant which
meets the criteria to be classified as held for sale at 1 July 20X9. The original cost of
the asset was £120,000 with an estimated useful life of 10 years and, at 1 January
20X9, had accumulated depreciation of £36,000. At 1 July 20X9 the fair value of the
plant is £50,000 with costs to sell estimated at £4,000.
Suppose that the plant is still held for sale at 31 December 20X9, and, at this date,
the fair value and estimated costs to sell are respectively:
Scenario 1: £45,000 and £4,000
Scenario 2: £55,000 and £5,000.
Required:
(a) Show how this asset would be accounted for in the 20X9 FS
(b) Show how the changes in FVLC would be accounted for under scenario 1 and 2.

Task 7:
01/01/20X1: A Co acquired a plant of $1,000,000 with the estimated useful life of 10
years. A Co chose to measure the plant under cost model.
31/12/20X4: A Co reclassified the plant as non-current asset held for sale. The fair
value less costs to sell at that date was $550,000
01/04/20X5: Due to changes in A Co’s strategy, the plant will be used to manufacture
new products. The value-in-use estimated based on net cash flows and the fair value
less cost to sell at the date of reclassification were $700,000 and $590,000
respectively.
At what amount should the property be reported in A Co’s SOFP at 31 Dec 20X4 &
01 Apr 20X5?
Task 8:
Extracts from the financial statements of Perseus Co ar as follows:
STATEMENT OF PROFIT OR LOSS STATEMENT OF FINANCIAL POSITIONS
$’000 $’000
Operating profit 230 Ordinary shares 2,000
Finance costs (15) Revaluation surplus 300
Profit before tax 215 Retained earnings 1,200
Income tax (15) 10% Loan notes 1,000
Profit for the year 200 Current liabilities 100
What is the return on capital employed (ROCE)?

Task 9:
Sandbag plc is a listed manufacturing company. Its summarised Financial statement
is given below.
STATEMENT OF FINANCIAL POSITION AS AT 31 DEC 20X4
$’000 $’000
NCA 610 $1 ordinary shares 400
Inventories 96 Retained earnings 190
Trade receivables 29 NCL – loans 50
Current asset investments 5 Trade & other payables 103
Cash & cash equivalent 3
Total assets 743 Total liabilities + equity 743
What is Sandbag plc’s quick ratio at 31 Dec 20X4

Task 10:
The statements of profit or loss for the years ended 31 December 20X9 and 20X8,
and the statements of financial position at these dates for Squirt Ltd are shown as
follows.
Statements of Profit or Loss for the years ended

20X9 20X8
£000 £000

Revenue 1200 900

Cost of sales (600) (525)

Gross profit 600 375

Operating expenses (300) (225)

Operating profit 300 150

Interest (60) (15)

Profit before tax 240 135

 Taxation (90) (45)

Profit for the year 150 90

Statements of Financial position at 31 December

20X9 20X8

£000 £000 £000 £000

Non-current assets 1,800 1,320

Current assets

Inventory 300 360

Trade receivables 96 66

Cash - 18

396 444

Total assets 2,196 1,764

Equity 1,653 1,592

Non-current liabilities

Loan 300 75

Current liabilities

Trade payables 180 97

Bank 63 -

243 97

2,196 1,764
Calculate the following ratios for the company for each of the two years:
a. Return on capital employed
b. Asset turnover
c. Net profit margin
d. Gross profit percentage
e. Current ratio
f. Liquid ratio
g. Inventory turnover
h. Receivables collection period
i. Payables payment period.
Task 11:
Dewy plc is a company with 3 operating segments and no other activities except
those of the 3 operating segments. It reports in accordance with the minimum
requirements of IFRS 8.

Operating Internal External Total Profit/ Assets

segment revenue revenue revenue (Loss)

Sparrow 50 940 990 310 80

Hawl 30 80 110 (10) 70

Eagle - 400 400 170 570

Owl 240 220 460 40 120

Robin 50 160 210 (140) 80

Thrush 30 200 230 30 80

Which operating segments is a reportable segments based on reported profit/(loss)
criteria?

Task 12:
Financial date relating to the operating segments of Drax plc is as follow (Assume all
revenue earned is external):

Segment External revenue Profit/ (Loss) Assets

A 2,000 250 1,500

B 400 (70) 1,100

C 3,000 300 1,900

D 1,500 (20) 600

E 50 (120) 400
Identify the reportable segments of Drax plc.

Task 13:
The following information is available about the PPE of Lak Co for the year to 31 Dec
20X3.
$’000
Carrying amount of assets at beginning of year 462
Carrying amount of assets at end of the year 633
Disposals during the year, at cost 110
Accumulated depreciation on the assets disposed of 65
Depreciation charge for the year 38
Based on this information, what amount will be included for purchases of PPE for the
year in a statement of cash flows that complies with IAS 7?

Task 14:
Hammersmith charges a loss of $64,000 on the disposal of NCA. The NCA note
shows that the assets disposed of had a cost of $199,000 and related depreciation of
$78,000. What were the cash proceeds?

Task 15:
Middlesex has opening NCA at cost of $645,000 and closing NCA at cost of
$457,000. The cost of assets disposed of during the year was $423,000 with related
depreciation of $97,000. A gain on disposal of $73,000 was reported. What is the
proceed from the disposal of NCAs and what is the payment to acquire the NCA
during the year?

Task 16:
Thomas has opening tangible assets at NBV of 444,000 and closing tangible assets
at NBV of $563,000. The cost of assets purchased during the year was $231,000
and there were no disposals during the year. What was the depreciation charge for
the year?

Task 17:
Ormond claims $22,000 of investment income in its income statement. Investment
income receivable in the opening balance sheet is $5,000 and the closing
receivables is $2,000. How much investment income has been received in cash?
Task Key

1 EPS for 20X8: $1.35/ share

EPS for 20X2: 10 cents/ share

2
Restate EPS for 20X1: 10 cents/ share

EPS for 20X2: 15.4 cents/ share

3
Restate EPS for 20X1: 18.3 cents/ share

EPS for the year ended 31 Dec, X1: 16.5 cents/ share
4
Restate EPS for the year ended 31 Dec, X1: 17.1 cents/ share

5 NCA held for sale is valued at $36.8 million

a. NCA held for sale is valued at $46,000

6 b. Scenario 1: NCA held for sale is valued at $41,000
Scenario 2: NCA held for sale is valued at $46,000

● 31/12/X4: NCA held for sale is valued at $550,000

7
● NCA without classification as held for sale is valued at $575,000

8 ROCE = 5%

9 Quick ratio = 0.36

20X9
a. Return on capital employed: 15.36%
b. Asset turnover: 61.44%
c. Net profit margin: 25%
d. Gross profit percentage: 50%
e. Current ratio: 1.63 (1.63:1)
f. Liquid ratio: 0.40 (0.40:1)
g. Inventory turnover: 1.82 times
h. Receivables collection period: 29 days
i. Payables payment period: 110 days
10
20X8
a. Return on capital employed: 9%
b. Asset turnover: 53.99%
c. Net profit margin: 16.67%
d. Gross profit percentage: 41.67%
e. Current ratio: 4.58 (4.58:1)
f. Liquid ratio: 0.87 (0.87:1)
g. Inventory turnover: 1.59 times
h. Receivables collection period: 27 days
i. Payables payment period: 67 days
11 Sparrow, Eagle, Robin

● External revenue: A,C, D

12 ● Profit/ (Loss): A, B, C, E
● Assets: A, B, C, D

13 purchases of PPE: $254,000

14 Cash proceeds: $185,000

● Proceeds: $399,000
15
● NCA acquired: $235,000

16 NCA Depreciation charged: $112,000

17 Investment Income Receivable: $25,000