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3.Hills Inc. acquired subsidiary X for 550 ($,000) in 20X2 and also bought Property, plant and equipment for 350($,000).

Hills Inc. Consolidated statement of comprehensive income for the period ended 20X2

Sales 30,650

Cost of sales ( 26,000)

Gross profit 4,650

Depreciation ( 450)

Administrative and selling expenses ( 910)

Interest expense ( 400)

Investment income 500

Foreign exchange loss ( 40)

Profit before taxation 3,350

Taxes on income ( 300)

Profit 3,050 (a)

(a) The entity did not recognize any components of other comprehensive income in the period ended 20X2

Hills Inc. Consolidated statement of financial position as at end of 20X2.

Assets 20x2 20x1

Cash and cash equivalents 230 160

Accounts receivable 1,900 1,200

Inventory 1,000 1,950

Portfolio investments 2,500 2,500

Property, plant and equipment net 2,280 850

Total assets 7,910 6,660

Liabilities

Trade payables 150 1,890

Interest payable 230 100

Income taxes payable 400 1,000

Long-term debt 2,300 1,040

Total liabilities 3,180 4,030

Shareholders equity Share capita 1,500 1,250

Retained earnings 3,230 1,380

Total shareholders equity 4,730 2,630

Total liabilities and shareholders equity 7,910 6,660

Note: Figures are in ($,000) Additional Notes;

1. It was found out that Hills proceeds from sale of equipment was 20,000 and they also received a dividend of 200,000 and Interest of 200,000.

2. Hill Inc paid lease liabilities of 90,000

3. Had proceeds from Long-term borrowings of 250,000.

4. 250 trade payables include trade payables of 100 yet to be made

5. In May of 20x2 they paid dividend of 1200 Required: A. Prepare the Consolidated Cash Flow Statement for Hills Inc. using Indirect Method.

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