Certificate in Accounting and Finance Stage Examinations
School of
Accountancy
Test 7 (December 22, 2021)
30 minutes – 18 marks
Additional reading time – 5 minutes
Financial Accounting and Reporting 1
Q.1
Clay Pakistan Limited (CPL), a public listed company is in the process of finalizing its accounts
for the year ended 30 June 2011. The following information is available:
i) The profit after tax and other comprehensive income for the years ended 30 June 2009, 2010
and 2011 (based on draft financial statements) are as follows:
2011
Profit after tax
Other comprehensive income:
5,240
Revaluation surplus
Total comprehensive income
2,000
7,240
2010
2009
Rs. in million
4,120
4,120
3,710
3,710
ii) CPL changed the method of valuation of inventories from weighted average to first-in first
out (FIFO), for the year ended 30 June 2011. The impact of this change is given:
Year ended
30 June 2009
30 June 2010
30 June 2011
Impact on inventory valuation
Increased by Rs. 20 million
Decreased by Rs. 30 million
Increased by Rs. 20 million
The above change has not been incorporated in the financial statements.
iii) Cash dividend and bonuses declared/paid during the three years are as follows:
Cash dividend
For the year ended 30 June 2009
For the year ended 30 June 2010
For the year ended 30 June 2011
Interim
15%
20%
Final
25%
20%
30%
Bonus
Interim
Final
10%
10%
Final dividends are declared at the end of August.
iv) CPL follows a policy of transferring 30% of its profit after tax to general reserve.
v) Share capital and reserves as at 30 June 2009 and 2010 were as follows:
2010
2009
Rs. in million
10,340
9,400
6,441
8,210
10,156
8,905
6,808
5,410
Share capital
(Rs. 10 each)
Revaluation surplus
General reserve
Un-appropriated profit
vi) Transfer from revaluation surplus to retained earnings amount to Rs. 1,769 million and Rs.
1,483 million in 2010 and 2011 respectively.
vii) A right issue was made for 1 share for every 4 shares 15 July 2010 at Rs.13 per share.
Required: Prepare Statement of Changes in Equity for the year ended 30 June 2011.
(Good luck)
(18)