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Advanced Financial Accounting Sample Paper 2 Questions & Suggested Solutions

Advanced Financial Accounting Sample Paper 2 of 27

INSTRUCTIONS TO CANDIDATES

PLEASE READ CAREFULLY

Candidates must indicate clearly whether they are answering the paper in accordance with the law and practice of Northern Ireland or the Republic of Ireland. In this examination paper the €/£ symbol may be understood and used by candidates in Northern Ireland to indicate the UK pound sterling by candidates in the Republic of Ireland to indicate the Euro. Answer ALL THREE questions in Section A and TWO of the THREE questions in Section B. If more than TWO questions is answered in Section B, then only the first TWO questions, in the order filed, will be corrected. Candidates should allocate their time carefully. All workings should be shown. All figures should be labelled, as appropriate, e.g. €’s, £’s, units etc. Answers should be illustrated with examples, where appropriate. Question 1 begins on Page 2 overleaf.

NOTE: This sample paper and solution have been prepared in recognition that public companies

are now required to prepare accounts implementing the language of International Accounting Standards (I.A.S.’s) but that other companies and non corporate entities are not required to do so.

Examinees would be at liberty to use the language of either (i) I.A.S.’s or (ii) the

Companies (Amendment) Act 1986 and F.R.S.’s/S.S.A.P’s in answering questions relating to non‐public companies


SECTION A

Answer ALL THREE Questions in this Section (The total marks for section A will be 60, made up of a theory question of 20 marks, a multiple choice question of 15 marks and a further question of 25 marks)

QUESTION 1 (i) The ASB and the IASB are responsible for issuing new accounting standards.

What are ‘accounting standards’ and describe the objective of such standards. 8 marks

(ii) Describe the steps involved in the standard setting process and the measures taken to improve

transparency within the process. 12 marks

Total 20 marks

QUESTION 2 The following multiple choice question consists of TEN parts, each of which is followed by FOUR possible answers. There is ONLY ONE right answer in each part. Each part carries 1½ marks. Requirement Indicate the right answer to each of the following TEN parts.

Total 15 Marks N.B. Candidates should answer this question by ticking the appropriate boxes on the special green

answer sheet which is supplied with the examination paper. [1] In accordance with IAS 2 ‘Inventories’ net realisable value is defined as: (a) the actual or estimated selling price (b) the actual or estimated selling price less all further costs to completion and all costs to be

incurred in marketing, selling and distribution (c) the actual or estimated selling price less all costs to be incurred in marketing selling and

distribution (d) the actual or estimated selling price less all further costs to be completion


QUESTION 2 (cont’d)

BACKGROUND INFORMATION TO PARTS [2] & [3]

Brian and Jean are in partnership and their capital account balances are £/€ 56,000 and £/€ 84,000 respectively. The partnership agreement details appropriation of partnership profits as follows:

Brian Jean

Annual salary £/€19,500 £/€28,000 Interest on capital 10 % 10 % Share of residual profit 40 % 60 %

[2] If the profit for the year, before appropriation, was £/€112,000 what would Brian’s entitlement be

in total:

[a] £/€ 25,100 [b] £/€ 30,300 [c] £/€ 45,300 [d] £/€ 20,200

[3] If the profit for the year, before appropriation, was £/€112,000 what would Jean’s entitlement be

in total:

(a) £/€ 45,300 (b) £/€ 30,300 (c) £/€ 25,100 (d) £/€ 66,700

[4] In accordance with IAS 10 ‘Events after the balance sheet date’ the clarification after balance

sheet date of proceeds from assets sold before the balance sheet date is an example of: (a) an adjusting event (b) a non-adjusting event (c) a material event

(d) an immaterial event [5] The formula for price earnings ratio is: (a) dividend per share / market value per share (b) earnings per share / market value per share (c) market value per share / earnings per share (d) market value per share / dividend per share


QUESTION 2 (cont’d) [6] Company A has inventory days of 23 and receivable days of 38. Ideally payable days should be: (a) greater than 38 but less than 61 (b) greater than 61 (c) less than 61 (d) greater than 23 but less than 61

[7] If a capital grant is recognised as deferred income in the balance sheet what are the entries to be made each year over the useful life of the associated asset: (a) debit deferred income, credit other operating income (b) credit deferred income, debit other operating income (c) debit deferred income, credit bank (d) credit deferred income, debit bank

BACKGROUND INFORMATION TO PARTS [8] & [9]

The business premises of ABC Limited went on fire on 30 November 2010 and financial records were destroyed. However the following information is available:

£/€ Receivables : opening 45,000 Closing 56,000 Inventory : opening 60,000 Closing 44,000 Sales (credit) 270,000 Bad debts 14,000 Gross margin 20%

[8] Using the information available what is the value of purchases: (a) £/€ 112,000 (b) £/€ 209,000 (c) £/€ 121,000 (d) £/€ 200,000 [9] Using the information available what is the value of sales receipts: (a) £/€ 295,000 (b) £/€ 245,000 (c) £/€ 273,000 (d) £/€ 259,000


QUESTION 2 (cont’d) [10] In preparing a cash flow statement in accordance with IAS 7 a profit on disposal of a fixed asset

should be:

(a) deducted from operating profit in computing the net cash flow from operating activities (b) added back to operating profit in computing the net cash flow from operating activities (c) Deducted from payments to acquire tangible fixed assets to compute capital expenditure (d) Added to payments to acquire tangible fixed assets to compute capital expenditure


QUESTION 3 WIRE Ltd., a retailing company, has an authorised share capital of €/£2,500,000, comprised of 4,000,000 ordinary shares of 50 cent/pence each and €/£500,000 of 5% preference shares of €/£1 each. The following trial balance was extracted as at 31st December 2009 €/£’000 €/£’000

Ordinary share capital ...................................................................... 1,500 5% preference share capital ............................................................. 300 Share premium account ................................................................... 150 General reserve ................................................................................ 230 Retained profits at 1 January 2009 .................................................. 41 6% debenture stock (redeemable in 2013) ...................................... 200 Freehold premises at cost at 1st January 2009 ................................. 2,500 Freehold premises accumulated depreciation at 1st January 2009 .. 400 Plant & machinery at cost at 1st January 2009 ................................ 420 Plant & machinery accumulated depreciation at 1st January 2009 . 240 Motor vehicles at cost at 1st January 2009 ...................................... 120 Motor vehicles accumulated depreciation at 1st January 2009 ....... 70 Computer equip at cost ................................................................... 120 Computer equip accumulated depreciation at 1st January 2009 ..... 45 Additions to non-current assets at cost: Plant & machinery ...................................................................... 70 Motor vehicles ............................................................................ 25 Computer equipment .................................................................. 30 Disposal of motor vehicles (sale proceeds) ..................................... 24 Inventory at 31 December 2009 ...................................................... 50 Receivables & payables ................................................................... 156 85 Bank ................................................................................................. 66 VAT .................................................................................................. 32 Corporation tax ................................................................................ 98 Prepayments & accruals................................................................... 12 18 Long term investments ..................................................................... 60 Short term investments .................................................................... 40 Retained profit for the year (after providing for dividends and ..... debenture interest but before adjusting for items 1 to 3 below) ..... 146 Deferred government grants at 1st January 2009 ............................. 90 .................................................................................................... ________ _______ 3,669 3,669

ADDITIONAL INFORMATION (1) Depreciation is to be provided on non-current assets as follows: Freehold premises .............................. 2% on cost Plant & machinery .............................. 10% on cost Motor vehicles ................................... 20% on cost Computer equipment .......................... 33 1/3 % on cost A full year’s depreciation is provided in the year of purchase and none in the year of disposal.


QUESTION 3 (Cont’d) (2) During the year motor vehicles which cost £/€ 45,000 in 2006 were disposed of for £/€ 24,000.

The only entries made (before extracting the above trial balance) were to debit the bank account and credit the disposal of motor vehicles account.

(3) The deferred government grants balance included in the above trial balance arises in respect of a

grant of £/€ 100,000 received in 2008 to help finance the cost of plant and machinery purchased during that year.

In addition a grant of £/€ 18,000 was received on 29th December 2009 towards the cost of new

computers purchased during the year. This grant has not yet been recorded in the company’s books.

(4) Prepaid expenses valued at €/£24,000 were incorrectly included in operating costs.

Requirement (a) Prepare, in a form suitable for publication, the statement of financial position for WIRE Ltd., for

the year ended 31st December 2009 in as far as the information provided permits. N. B. You are NOT required to prepare an Statement of Profit & Loss or notes to the accounts. You are

required to submit workings to show the make-up of the figures in the statement of financial position.

17 Marks

(b) Prepare the following notes to the accounts for the year ended 31 December 2009: (i) Non-current assets (ii) Deferred government grants

6 Marks

Presentation 2 marks Total 25 Marks


SECTION B Answer TWO of the THREE questions in this Section

QUESTION 4 CARTER Limited is installing a new production plant at a cost of £/€ 1 million, in respect of which government grants have been approved as follows: Capital cost - 40% Training costs - 100% The company depreciates its plant and equipment on the basis of 20% on original cost. The directors are aware that the accounting treatment for grants is dealt with in IAS 20 Accounting for Government Grants and Disclosure of Government Assistance, and they have asked you to advise them on the accounting options available to them and the effect which they would have on the company’s financial statements. Requirement You are required to draft a report to the directors which:

(a) outlines the accounting treatment of the foregoing grants under IAS 20; (b) recommends (with reasons) the treatment which you believe would be most suitable in the case

of CARTER Limited; and (c) indicate the form of accounting policy or other notes which should be included in the annual

financial statements of the company. 18 Marks

Presentation 2 marks

Total 20 Marks

QUESTION 5 The following errors were identified by the financial accountant of CUSACK Limited (a VAT registered company) when reviewing the year end draft financial statements: [i] A cheque was written for £/€20,000 to MAC GARAGE Limited and was entered into the motor

expense account. No other entries were made in the financial records. The cheque was in respect of the balancing payment for the purchase of a new car. A car which has originally cost £/€13,000 and which had a net book value of £/€6,500 at 1st January 2010 was traded in as part exchange. Assume no loss or gain was made on the trade-in.

[ii] Depreciation on motor vehicles is charged at 25% per annum with a full year’s depreciation charged

in the year of acquisition and none in the year of disposal. No account was taken of the transactions in note (i) above when calculating the depreciation for the year to December 2010.

[iii] During the year a new machine was purchased for £/€484,000 (which is inclusive of VAT of 21%).

CUSACK Limited received a government grant of £/€60,000 towards the cost of the new machine. Plant and machinery is depreciated at a rate of 10% per annum including a full year’s depreciation in the year of acquisition. No entries were made to record this transaction.


QUESTION 5 (cont’d) Requirement (a) Prepare the journal entries to show how each of the above items should be dealt with in the final accounts for the year ended 31st December 2010. Narratives for the journals are required.

15 marks

(b) Compute the adjusted net profit before taxation for the year ended 31st December 2010 taking into account the adjustments made at (a) above. The net profit before taxation as per the draft accounts was £/€ 350,000.

3 marks

Presentation 2 marks Total 20 Marks

QUESTION 6 The Statement of Financial Position, Statement of Changes in Equity and other relevant information of CLINIC Limited, for the year ended 31 December 2010, are as follows: Statement of Changes in Equity as at 31 December 2010

Ord share

capital Share

premium

Retained profits

Total equity

£/€'000 £/€'000 £/€'000 £/€'000 As at 1 January 2010 270 - 180 450 Net profit for year end 31 December 2010 90 90 Share issue 30 30 60 Ordinary dividends ( 60) (60) 300 30 210 540


QUESTION 6 (cont’d)

Statement of Financial Position as at 31 December 2010 £/€'000 £/€'000 £/€'000 £/€'000 ASSETS Non-current assets 1,440 1,320 Current assets Inventory 1,890 1,530 Receivables 2,850 2,130 Cash & cash equivalents 30 30 4,770 3,690 Total assets 6,210 5,010 EQUITY and LIABILITIES Capital and reserves £/€1 ordinary shares 300 270 Preference shares 300 300 Share premium account 30 - Retained earnings 210 180 840 750 Non-current liabilities Bank loans 2,190 1,800 10% debentures 1,140 900 3,330 2,700 Current liabilities Bank overdraft 30 - Current installments due on loans 540 540 10% debentures 300 - Trade payables 1,140 930 Taxation 30 90 2,040 1,560 Total equity and liabilities 6,210 5,010


QUESTION 6(Cont’d) Additional information: (1) On 1 July 2010 CLINIC issued £/€ 1 ordinary shares at £/€ 2 per share. (2) During the year CLINIC sold non-current assets with a net book value of £/€90,000 for cash.

Included in the Statement of Profit & Loss is a profit on disposal of £/€ 60,000. (3) Included in trade payables at 31 December 2010 is an amount of £/€ 450,000 in respect of non-

current assets purchased during the year. (4) The Statement of Profit & Loss includes the following charges for the year: ............................................................ 31 Dec 2010 31 Dec 2009 (i) Depreciation ....................... £/€ 600,000 £/€ 550,000 (ii) Interest ...................................... £/€ 540,000 £/€ 270,000 (iii) Tax ............................................ £/€ 30,000 £/€ 60,000 Requirement (a) Prepare a statement of cash flows for CLINIC Limited for the year ended 31 December 2010 in accordance with IAS 7 Statement of Cash Flows. . N. B. You are NOT required to prepare notes to the statement of cash flows.

18 Marks Presentation 2 marks

Total 20 Marks


Advanced Financial Accounting

Sample Paper 2 – Suggested Solutions

NOTE: This sample paper and solution have been prepared in recognition that public companies

are now required to prepare accounts implementing the language of International Accounting Standards (I.A.S.’s) but that other companies and non corporate entities are not required to do so.

Examinees would be at liberty to use the language of either (i) I.A.S.’s, (ii) the Companies

(Amendment) Act 1986 and F.R.S.’s/S.S.A.P’s in answering questions relating to non‐public companies.


Solution to question 1 (a) What are Accounting Standards and describe the objectives of these standards.

Accounting standards are a set of rules that describe how an item in financial accounting is treated and calculated and how accounts should be prepared and presented. The objective of accounting standards is to regulate the accounting profession and to provide guidance to both accounting practitioners and users of financial information about how contentious and difficult areas should be treated. Accounting standards are issued by a national or international body of the accounting profession and are intended to apply to all financial accounts which are intended to give a true and fair view of the financial position and profit/loss of an entity. Standards are detailed working regulations within the framework of government legislation and they cover areas in which the law is silent.

(b) Standard setting process The standard setting process involves six steps and a consultation process which involves interested parties and organisations from around the world. The six steps are discussed below:

1. Setting the agenda

This step in the process involves deciding on what area in financial accounting needs to be addressed through a standard. When deciding if an item should be added to the agenda the IASB considers the following factors: i. the relevance of the information to users ii. the reliability of the information which would be provided iii. existing guidance in the area iv. whether the new item increases the possibility of convergence and resource constraints.

2. Planning the project

Once an item has been added to the agenda the next decision to be made is whether the IASB should undertake the project alone or in conjunction with another body such as the ASB in Ireland or the UK. Once this has been determined a project team is assembled.

3. Developing and publishing the discussion paper

The purpose of a discussion paper is to solicit early comment from interested parties in an effort to ensure all issues are identified and discussed. A discussion paper will usually contain the following elements: i. a detailed overview of the issue stating why a standard is required in this area ii. different potential approaches for dealing with the issue iii. preliminary views of the IASB on dealing with the issue, and iv. an invitation to comment on the issue.


4. Developing and publishing the exposure draft

Once the IASB has received and discussed all comments received a draft standard is prepared detailing a specific proposal for dealing with the issue. The draft standard is then issued to interest parties for consideration and comment.

5. Developing and publishing the standard

Once the exposure draft has been issued comments will be received by the IASB on the proposed treatment. The IASB may then decide that it is satisfied with the proposed treatment and a draft IFRS is drawn up. This draft IFRS is referred to as a pre‐ballot draft. The pre‐ballot draft is normally subjected to external review which is usually undertaken by IFRIC. IASB members are then balloted and if the ballot is in favour of the publication of the standard then the IFRS is issued. Where the IASB is not satisfied that it is in a position to agree on the proposed treatment then a second exposure draft may be issued suggesting a revised treatment of the item in question.

6. After the standard is issued

The process is not complete once the standard is issued. At this stage the IASB hold further meetings with interested parties in order to understand any unanticipated issues relating to the practical application of the standard.

Transparency within the process

As can be seen from the above discussion throughout the process public consultation is either invited or considered. It is not possible for an accounting standard to be issued without taking on board comments from interested parties. This avoids the situation whereby the process becomes a pure academic exercise and ensures that the practical application is considered, understood and provided for.


Solution to question 2 (1) B (2) C (see working) (3) D (see working) (4) A (5) C (6) B (7) A (8) D (see working) (9) B (see working) (10) A Workings: (2) 112,000 – (19,500+ 28,000) ‐10%(56,000 + 84,000) = 50,500 x 40% = 20,200 20,200 + 19,500 + 5,600 = 45,300 (3) 50,500 x 60% = 30,300 + 28,000 + 8,400 = 66,700 (8) Sales 270,000 Gross margin 20% = 54,000 Cost of sales = 270, 000 – 54,000 = 216,000 216,000 + closing inventory 44,000 – opening inventory 60,000 = purchases 200,000 (9) Opening receivables 45,000 + sales 270,000 = 315,000 315,000 – bad debts 14,000 – closing receivables 56,000 = sales receipts 245,000


Solution to question 3 (a)

WIRE Ltd.

Statement of financial position as at 31 December 2009

£/€’000 £/€’000

Noncurrent assets Property, plant & equipment (Note 1) 2,343 Other financial assets 60 2,403 Current assets Inventories 50 Trade receivables 156 Prepayments (W1) 36 Cash and cash equivalents (W2) 124 366 Total assets 2,769 Equity and liabilities Capital (W4) 1,800 Reserves 380 Accumulated profits (W3) 64 2,244 Noncurrent liabilities Interest‐bearing borrowings 200 200 Current liabilities Trade and other payables (W7) 233 233 Deferred government grants (Note 2) 92 2,769


Solution to question 3(cont’d) (b)

WIRE LIMITED

Notes to the Accounts for the year ended 31 December 2009 (1) Property, plant and equipment

Freehold premises

Plant & machinery

Motor vehicles

Computer equip Total

£/€’000 £/€’000 £/€’000 £/€’000 £/€’000 Cost at 1st January 2009 2,500 420 120 120 3,160 additions 70 25 30 125 disposals (45) (45)

at 31st December 2009 2,500 490 100 150 3,240

Accumulated depreciation at 1st January 2009 400 240 70 45 755 charge for year 50 49 20 50 169 450 289 90 95 924 disposals 0 0 (27) 0 (27)

at 31st December 2009 450 289 63 95 897

Net book value at 1st January 2009 2,100 180 50 75 2,405

at 31st December 2009 2,050 201 37 55 2,343

(2) Deferred government grants At 1st January 2009 90 Received during the year 18 108 Released to profit and loss account during the year (16) At 31st December 2009 92


Solution to question 3(cont’d) Workings (1) Prepayments £/€’000 Prepayments per trial balance 12 Add prepayments omitted in error 24 36 (2) Cash and cash equivalents £/€’000 Bank balance 66 Short term investment 40 106 Government grant received 18 124 (3) Accumulated profits

£/€’000

Retained profit for year per trial balance 146 Profit on disposal of motor vehicle 6 Depreciation (Note 1) (169) Prepayments 24 Government grants released 16

23 Retained Profit brought forward 1 Jan 2009 41 Accumulated profits 64 (4) Issued capital £/€’000 Ordinary share capital 1,500 8% preference capital 300 1,800


Solution to question 3(cont’d) (5) Reserves £/€’000 Share premium 150 General reserves 230 380 (7) Trade and other payables £/€’000 Trade payables per Trial Balance 85 Corporation tax 98 VAT 32 Accrued expenses 18 233 (8) Disposal of motor vehicle £/€’000 Cost in 2006 45 Depreciation charge:

2006 9 2007 9 2008 9

NBV 18 Proceeds 24 Profit on disposal 6


Solution to question 4 To : The Directors From : A. Accountant Date : XX/MM/YY Subject : Accounting treatment of government grants A. Accounting treatment The grants which have been approved for the new production facility fall into two distinct categories: 1. Revenue based grant – the grant for training costs 2. Capital based grant – the grant for plant The above two grants are treated differently for accounting purposes. IAS 20 provides that: (i) Revenue based grants are to be credited to revenue in the period in which the

related revenue expenditure has been incurred and, where actual amounts are not known for certain, appropriate estimates must be made; and

(ii) Capital based grants on the other hand are to be credited to revenue over the life of the related non‐current asset by either: i. Reducing the cost of the asset by the full amount of the grants; or ii. Treating the amount of the grant as deferred credit, a portion of which is

transferred to revenue annually. Where this method is used the amount of the deferred credit, if material, should be shown separately in the statement of financial position and separate from shareholders’ funds.

Where there is a contingent liability to repay any grants received this must be disclosed by way of note to the accounts. B. Recommendations As far as the company is concerned, I recommend that the following accounting policies be adopted: Training grants – these grants be credited to revenue as they are due; and Grants on plant – these grants be treated as deferred credits and disclosed separately in the statement of financial position under the heading ‘Government Grants’ and allocated to the statement of comprehensive income over the life of the asset using the same rates of depreciation as applied to the relevant assets. C. Accounting policies The notes to the accounts of CARTER Limited should include the following: (i) Grants receivable on additions to non‐current assets are credited to the Government

Grants Account and are allocated to the statement of comprehensive income over the estimated useful lives of the assets concerned. Revenue based grants are credited directly to the statement of comprehensive income in the year in which they become due.


(ii) £/€ Balance at start of year XXXX Received during the year XXXX Released to the profit and loss account during the year XXXX Balance at end of year XXXXX (iii) Contingent liabilities Under various agreements between the company and grant awarding bodies the Company has received grants amounting to £/€ XXX during the year. There exists a contingent liability to repay in whole or in part the grants received if certain circumstances set out in the agreement occur.


Solution to question 5 (a) DR CR

(i) DR Motor vehicles (B/S) 26,500 CR Motor vehicles (B/S) 13,000 DR Accumulated depreciation 6,500 CR Motor vehicles expense (P&L) 20,000 [Being correction of cheque debited to motor expense in error and disposal of motor vehicle in part payment]

(ii) DR Depreciation (P&L) 3,375 CR Accumulated depreciation (B/S) 3,375 [Being calculation of depreciation charge on additions (6,625 – 3,250)]

(iii) DR Plant & machinery 400,000 DR VAT recoverable 84,000 CR Bank 484,000 [Being purchase of new machine] DR Depreciation (P&L) 40,000 CR Accumulated depreciation (B/S) 40,000 [Being calculation of depreciation on new machine] DR Bank 60,000 Cr Deferred income (B/S) 60,000 [Being receipt of government grant] DR Deferred income (B/S) 6,000 CR Grant released (P&L) 6,000 [Being release of proportion of grant to Statement of Profit & Loss]


Solution to question 5 (cont’d) (b) £/€ Net profit before tax 350,000 (i) Motor vehicle expense 20,000 (ii) Motor vehicle depreciation (3,375) (iii) Plant and machinery (40,000) (iii) Grant released 6,000 Revised net profit 332,625


Solution to question 6 [a]

CLINIC Limited

Statement of Cash Flows for the year ended 31 December 2010

£/€ '000 £/€ '000 Cash flows from operating activities Net profit before interest (W1) 660 Adjustments for: Depreciation 600 Profit on disposal (W3) (60) Changes in working capital Increase in inventory (W2) (360) Increase in receivables (W2) (720) Decrease in payables (W2) (240) (780) Cash generated from operations (120) Interest paid (540) Tax paid (W4) (90) (630) Net cash from operating activities (750) Cash flows from investing activities Payment to acquire non-current assets (W5) (360) Receipt from sale of non-current assets (W3) 150 (210) Cash flows from financing Proceeds from share issue (incl share prem) 60 New bank loans (W6) 390Issue of new debentures (W7) 540 Dividends paid (60)

930 Decrease in cash and cash equivalents (30) Cash and cash equivalents at start of year 30Cash and cash equivalents at end of year 0


Workings (1) Net profit before interest £/€’000 Net profit for year 90 Add: tax 30 Add : interest 540 660

(2) Changes in working capital £/€’000 Inventory (1,890 – 1,530) 360 increase Receivables (2,850 – 2,130) 720 increase Trade payables (1,140 – 450 – 930) 240 decrease (3) Non‐current asset disposal £/€’000

NBV 90 Profit on sale 60 Sale proceeds 150

(4) Taxation £/€’000 Opening balance 90 Charge for year 30 Closing balance (30) Amount paid 90 (5) Non‐current asset acquisition £/€’000 Opening balance 1,320 Less: disposal (90) Depreciation charge (600) 630 Closing balance (1,440) Purchases 810 Amount owing included in trade payables 450 Amount paid 360


(6) Bank loans

£/€’000 Opening balance (1,800 + 540) 2,340 Closing balance (2,190 + 540) 2,730 New loans 390

(7) Debentures £/€’000 Opening balance 900 Closing balance (1,140 + 300) (1,440) New debentures issued 540

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