- 16 Marks
Question
The following financial statements relate to Conso Bank Ghana Limited for the year ended 31 December 2017:
Statement of Comprehensive Income for the year ended 31 December 2017
| Description | Note | GH¢’000 |
|---|---|---|
| Interest income | (iii) | 364,524 |
| Interest expense | (iv) | (107,571) |
| Net interest income | 256,953 | |
| Fees and commission income | 132,374 | |
| Fees and commission expense | (24,183) | |
| Net fees and commission income | 108,191 | |
| Other income | (v) | 9,727 |
| Operating income | 374,871 | |
| Impairment charge on loans and advances | (93,492) | |
| Operating expenses | (vi) | (169,317) |
| Profit before tax | 112,062 | |
| Income tax expense | (33,617) | |
| Profit for the year | 78,445 |
Statement of Financial Position as at 31 December 2017
| Description | Note | 2017 (GH¢’000) | 2016 (GH¢’000) |
|---|---|---|---|
| Assets | |||
| Cash and cash equivalents | 577,767 | 752,303 | |
| Government securities | 2,037,292 | 1,857,337 | |
| Advances to banks | 214,875 | 107,407 | |
| Loans and advances to customers | 1,190,782 | 1,145,133 | |
| Property and equipment | (vii) | 139,889 | 123,936 |
| Intangible assets | (viii) | 18,131 | 12,162 |
| Income tax asset | 6,626 | 5,778 | |
| Total assets | 4,185,362 | 4,004,056 | |
| Liabilities | |||
| Deposits from customers | 3,368,406 | 3,078,071 | |
| Other liabilities and provisions | 171,718 | 359,192 | |
| Total liabilities | 3,540,124 | 3,437,263 | |
| Equity | |||
| Stated capital | 100,000 | 100,000 | |
| Retained earnings | 545,238 | 466,793 | |
| Total equity | 645,238 | 566,793 | |
| Total liabilities and equity | 4,185,362 | 4,004,056 |
Required:
Using the indirect method, prepare a statement of cash flows for the year ended 31 December 2017, in accordance with IAS 7: Statement of Cash Flows.
(16 marks)
Answer
Conso Bank Ghana Limited Statement of Cash Flows for the year ended 31 December 2017
| Description | GH¢’000 |
|---|---|
| Cash flows from operating activities | |
| Profit for the year | 78,445 |
| Adjustments for: | |
| Depreciation | 30,688 |
| Amortisation | 6,077 |
| Other operating expenses (169,317-30,688-6,077) | 132,552 |
| Impairment charge on loans and advances | 93,492 |
| Net interest income | (256,953) |
| Dividend income | (9,685) |
| Profit on sale of property and equipment | (42) |
| Tax expense | 33,617 |
| Operating profit before changes in working capital | 108,191 |
| Change in loans and advances to customers | (45,649) |
| Change in advances to banks | (107,468) |
| Change in deposits from customers | 290,335 |
| Change in other liabilities and provisions | (187,474) |
| Change in government securities | (179,955) |
| Cash generated from operations | (230,211) |
| Interest received | 131,292 |
| Dividend received | 8,680 |
| Interest paid | (94,578) |
| Income tax paid | (34,465) |
| Net cash flow from operating activities | 111,091 |
| Cash flows from investing activities | |
| Acquisition of property and equipment | (46,641) |
| Proceeds from sale of property and equipment | 42 |
| Acquisition of intangible assets | (12,046) |
| Net cash used in investing activities | (58,645) |
| Cash flow from financing activities | |
| Dividend paid | (4,800) |
| Net cash used in financing activities | (4,800) |
| Net decrease in cash and cash equivalents | (174,356) |
| Cash and cash equivalents at 1 January 2017 | 752,303 |
| Cash and cash equivalents at 31 December 2017 | 577,767 |
(50 ticks @ 0.32 marks = 16 marks)
- Topic: Preparation of Financial Statements
- Series: NOV 2018
- Uploader: Dotse