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Answers - ACCA Global
AnswersProfessional Level Essentials Module, Paper P2 (INT)Corporate Reporting (International)March/June 2016 Sample Answers1 (a)Weston Group Statement of cash flows for year ended 31 January 2016$mCash flow from operating activitiesProfit for the year (W1)182 Finance cost23 Associate s profits(16)Service cost component11 Cash contributions to pension scheme(19)Depreciation (W7)20 Impairment on amortised cost asset (W1)8 Gain on contingent consideration (W8)(4)Impairment of goodwill (19 9 4)6 Amortisation of intangible assets7 218 Movements in working capitalIncrease in trade and other payables (W9)15 Increase in trade and other receivables (104 23 106)(25)Decrease in inventories (165 38 108)19 Cash generated from operating activities227 Finance costs paid (W8)(22)Income taxes paid (W5)(81) Net cash generated by operating activities124 Cash flows from investing activitiesPurc
(b) Statements of cash flows provide valuable information to stakeholders on the financial adaptability of an entity. Cash flows are objective and verifiable and so are more easily understood than profits. Profits can be manipulated through the use of judgement or choice of a particular accounting policy.
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