Page 338 - SBR Integrated Workbook STUDENT S18-J19

Chapter 21

Example 2

Acquisitions and disposals

Extracts from the consolidated statement of financial position for the Bjorn
group as at 31 December 20X1 (with prior year comparatives) are presented
below:

20X1 20X0
$m $m

Inventories 670 500

Receivables 290 480

Payables 310 290

During the year ended 31 December 20X1, Bjorn acquired a new subsidiary
(Louis) and disposed of a subsidiary (Edith). Details of the working capital of
these subsidiaries at their acquisition and disposal date are as follows:

Louis at acq’n Edith at disp.
$m $m

Inventories 50 20

Receivables 40 10

Payables 60 30

Calculate the increase or decrease in inventories, receivables and
payables for inclusion in the reconciliation between profit before tax and
cash generated from operations.

332