Question 1
ICAN
•
2025
•
FINANCIAL REPORTING
•
mixed
Case Stimulus
$$
\begin{array}{lrr}
\hline
\textbf{Statement of profit or loss for the year ended April 30, 2025} & & \\
\hline
& \textbf{N'million} & \textbf{N'million} \\
\text{Revenue} & & 164,985 \\
\text{Cost of sales} & & (118,095) \\
\hline
\textbf{Gross profit} & & \textbf{46,890} \\
\text{Interest received} & & 1,670 \\
\text{Administrative expenses} & & (25,025) \\
\text{Finance costs} & & (5,220) \\
\hline
\textbf{Profit before taxation} & & \textbf{18,315} \\
\text{Income tax expense} & 6,642 & \\
\text{Deferred tax} & 2,208 & (8,850) \\
\hline
\textbf{Profit for the year} & & \textbf{N9,465} \\
\hline
\end{array}
$$
The financial statements of Chukwuka Nigeria Limited are drafted below:
Additional Information
(i) A financial asset included in the trade investment with a carrying amount of N1,500 million was sold for N1,885 million during the year while a replacement was also acquired.
(ii) There was an issue of three billion, seven hundred and fifty million (3.7 billion) ordinary shares during the year at a premium of thirty two kobo per share.
(iii) The short-term investment is highly marketable with one to three months maturity profile.
(iv) During the financial year, the company paid dividend of N5,400 million to equity holders and this had been accounted for during the year.
(v) Delivery vans with original costs of N6,600 million and a carrying amount of N3,750 billion was sold for N2,520 million during the year.
(vi) The company is planning to take a long-term syndicated loan of N2,000 million from a healthy Nigerian bank. The company‟s financial statements and loan application had already been submitted to the bank and is awaiting approval.
(vii) Extract from property, plant and equipment schedule revealed:
2025 2024
N‟million N‟million
Cost 55,395 45,795
Accumulated depreciation 26,160
29,235
(viii) A cash payment of N58 million made in respect of insurance premium for the financial year ended April 30, 2025 was totally omitted in the books.
Requirements
(
a
)
Prepare a statement of cashflow for Chukwuka Nigeria Limited for the year ended April 30, 2025 using the indirect method.
(
b
)
In the context of IAS 7 – Statement of Cash flows, explain the term “cash and cash equivalents” and give two examples.
(
c
)
In accordance with IAS 1 – Presentation of Financial Statements, assets and liabilities must not be offset except when the offset is required by another standard. Give the exceptions to the rule regarding off setting provided by IAS 1.
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About This Question
This is
Ican
2025
Financial Reporting
Question 1.
It is one of the
mixed
questions from the
2025
Ican
Financial Reporting
examination.
The question covers
General
.
Difficulty level:
3
.