Week11_Discussion_Question_Solutions

Week11_Discussion_Question_Solutions - 17(3 000 40 1 4 500...

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Week 11 Discussion Questions 23.12 Calculation of ownership interests in profits Ownership interests are: Dampier Cook Perouse Quiros Parent shareholders: Direct 100% 40% Indirect 32% (0.4 x 0.8) 24% (0.4 x 0.6) NCI: Direct 60% 20% 40% Indirect 48% (0.6 x 0.8) 36% (0.6 x 0.6) 100% 100% 100% 100% Financial interests in net profits are: Total $ Dampier $ Cook $ Perouse $ Quiros $ Parent shareholders: Direct 190 000 56 000 Indirect (25 600) 16 320 Combined 236 720 190 000 56 000 (25 600) 16 320 NCI: Direct 84 000 (16 000) 27 200 Indirect (38 400) 24 480 Combined 81 280 84 000 (54 400) 51 680 Total profits 318 000 190 000 140 000 (80 000) 68 000
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23.15 Wholly owned three-tier group Consolidation worksheet at 31 December 20X8: Balance sheet Hanover Stuart Tudor Sum Eliminations Group Dr Cr Paid-up capital 80 000 40 000 20 000 140 000 60 000 1 80 000 Retained profits (loss)
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Unformatted text preview: 17 000 26 000 (3 000) 40 000 13 000 1 4 500 2 22 500 Owners’ equity 97 000 66 000 17 000 180 000 102 500 Accumulated goodwill impairment 2 4 500 4 500 Owners’ equity and asset contras 97 000 66 000 17 000 180 000 107 000 Investment in subsidiaries 55 000 23 000 – 78 000 1 78 000 – Consolidation goodwill 5 000 1 5 000 Other net assets 42 000 43 000 17 000 102 000 102 000 Total assets 97 000 66 000 17 000 180 000 82 500 82 500 107 000 Elimination 1: Substitution. See ‘total’ from calculation 1 below. Elimination 2: Impairment of consolidation goodwill. See calculation 2 below. Calculations 1 Equity acquired: By Stuart in Tudor $ By Hanover in Stuart $ Total $ Paid-up capital 20 000 40 000 60 000 Retained profits 2 000 11 000 13 000 Total acquired 22 000 51 000 73 000 Investment cost 23 000 55 000 78 000 Consolidation difference – goodwill 1 000 4 000 5 000 2 Consolidation goodwill impairment 500 4000 4 500...
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Week11_Discussion_Question_Solutions - 17(3 000 40 1 4 500...

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