SLS 4 - AC 3102 SLS#4 Complex Group Structure Q 1.1(a Group...

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AC 3102 SLS #4 Complex Group Structure
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Q2 Q3 Q4 Q5 Q6 Q7 Brian Q1 Q 1.1 (a) Group Profit After Tax Upstream Transaction C B $60,000 goods in store of B Ltd During 20x8 DR Cost of Sales (C) 10,000 CR Closing Stock (B) 10,000 Eliminate unrealised intragroup profit from Profit After Tax in C Ltd. 20% x $60,000 = $10,000 120% 1
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Q2 Q3 Q4 Q5 Q6 Q7 Brian Q1 Profit After Tax Group Shareholding A Ltd $100,000 - $100,000 B Ltd $80,000 80% $64,000 C Ltd ($50,000 - $10,000 ) 64% $25,600 Group $189,600 Q 1.1 (a) Group Profit After Tax A B C 80% 80% (20x4) (20x6) Eff. s/hing: 80% x 80% 2
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Q2 Q3 Q4 Q5 Q6 Q7 Brian Q1 Profit After Tax Group Shareholding B Ltd $80,000 20% $16,000 C Ltd ($50,000 - $10,000 ) 36% $14,400 NCI $30,400 Q 1.1 (b) NCI Profit After Tax A B C 80% 80% (20x4) (20x6) 3
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Q2 Q3 Q4 Q5 Q6 Q7 Brian Q1 Q 1.1 (c) Retained Profit A B C 80% 80% (20x4) (20x6) Retained Profit Group Shareholding A Ltd $500,000 - $500,000 B Ltd ($400,000 - $100,000 ) 80% $240,000 C Ltd ($300,000 - $100,000 - $10,000 ) 64% $121,600 Group $861,600 Pre Acquisition Retained Profit 4
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Q2 Q3 Q4 Q5 Q6 Q7 Brian Q1 Q 1.1 (d) NCI B C 80% (20x6) Share Capital Group Shareholding B Ltd $100,000 20% $20,000 C Ltd $100,000 20% $20,000 Pre Acquisition Retained Profit B Ltd $100,000 20% $20,000 C Ltd $100,000 20% $20,000 Post Acquisition Retained Profit B Ltd ($400,000 - $100,000 ) 20% $60,000 C Ltd ($300,000 - $100,000 - $10,000 ) 36% $68,400 NCI $208,400 5
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Q2 Q3 Q4 Q5 Q6 Q7 Brian Q1 Q 1.2 (a) Retained Profit Lateral Transaction N M $30,000 goods in store of N Ltd During 20x8 DR Cost of Sales (C) 10,000 CR Closing Stock (B) 10,000 Eliminate unrealised intragroup profit from Profit After Tax. 6
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Q2 Q3 Q4 Q5 Q6 Q7 Brian Q1 Q 1.2 (a) Retained Profit L M N 80% 80% (20x6) (20x4) Retained Profit Group Shareholding L Ltd $600,000 - $600,000 M Ltd ($500,000 - $200,000 - $10,000 ) 80% $232,000 N Ltd ($400,000 - $150,000 ) 64% $160,000 Group $992,000 Pre Acquisition Retained Profit 7
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Q2 Q3 Q4 Q5 Q6 Q7 Brian Q1 Q 1.2 (b) NCI M N 80% (20x4) 2 Share Capital Group Shareholding M Ltd $100,000 20% $20,000 N Ltd $100,000 20% $20,000 Pre Acquisition Retained Profit M Ltd $200,000 20% $40,000 N Ltd $100,000 20% $20,000 Post Acquisition Retained Profit M Ltd ($500,000 - $200,000 - $10,000 ) 20% $58,000 N Ltd ($400,000 - $100,000 ) 36% $108,000 NCI $266,000 8
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Q2 Q3 Q4 Q5 Q6 Q7 Brian Q1 Q 1.3 (a) NCI X Y Z 80% 60% (20x5) (20x5) (20x5) 10% Group Structure Group Y Ltd Z Ltd NCI Y Ltd Z Ltd Direct 80% 10% Direct 20% 30% Indirect - 48% Indirect - 12% Total 80% 58% Total 20% 42% 9
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Q2 Q3 Q4 Q5 Q6 Q7 Brian Q1 Q 1.3 (a) NCI X Y Z 80% 60% (20x5) (20x5) (20x5) 10% 100% - 10% - 60% = 30% (Direct) (100% - 80%) x 60% = 12% (Indirect) 10
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Q2 Q3 Q4 Q5 Q6 Q7 Brian Q1 Q 1.3 (a) NCI X Y Z 80% 60% (20x5) (20x5) (20x5) 10% Group Structure Group Y Ltd Z Ltd NCI Y Ltd Z Ltd Direct 80% 10% Direct 20% 30% Indirect - 48% Indirect - 12% Total 80% 58% Total 20% 42% 11
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Q2 Q3 Q4 Q5 Q6 Q7 Brian Q1 Q 1.3 (a) NCI Y Z 80% 60% (20x5) (20x5) (20x5) 10% 2 Share Capital Group Shareholding Y Ltd $400,000 20% $80,000 Z Ltd $300,000 30% $90,000 Pre Acquisition Retained Profit Y Ltd $200,000 20% $40,000 Z Ltd $100,000 30% $30,000 Post Acquisition Retained Profit Y Ltd ($600,000 - $200,000 ) 20% $80,000 Z Ltd ($300,000 - $100,000 ) 42% $84,000 NCI $404,000 12
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Q2 Q3 Q4 Q5 Q6 Q7 Brian Q1 Q 1.3 (b) Retained Profit X Y Z 80% 60% (20x5) (20x5) (20x5) 10% Retained Profit Group Shareholding X Ltd $900,000 - $900,000 Y Ltd ($600,000 - $200,000) 80% $320,000 Z Ltd ($300,000 - $100,000 ) 58% $116,000 Group 1,336,000 13
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Q1 Q3 Q4 Q5 Q6 Q7 Keying Q2 Q2 Assume that C Ltd’s reserves were $10m, $30m and $55m as at 31 December 20x1, 20x2, and 20x3 respectively. A B C 100% 100% (20x1) (20x2) (a) Assume that A Ltd acquired 100% of B Ltd on 31 December 20x1, and B Ltd acquired 100% of C Ltd on 31 December 20x2. How much of C Ltd’s reserve will be included in i. B Ltd’s group reserve ii. A Ltd’s group reserve as at 31 December 20x3?
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