B407F Week 5 Tutorial Solution

B407F Week 5 Tutorial Solution - B407F Week 5 Tutorial...

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1 B407F Week 5 Tutorial Solution -Consolidated Financial Statements (II) Question 1 (D & E) Consolidated journal entries: Debit ($000) Credit ($000) Share Capital 20 Revaluation reserves 30 Pre-acq profit 40 Goodwill 28 Investment in E Limited 100 NCI 18 (W1 – Elimination of investment in E Limited) Revaluation reserves (40-30) x 20% 2 Retained profits (80-40) x 20% 8 NCI 10 (W2 – Allocation of post-acquisition reserves and earnings to NCI) Debenture 20 Investment in debentures 20 (W3 – Elimination of investment in debenture in E Limited) Amount due to D Ltd 70 Cash in transit 30 Amount due from E Ltd 100 (W4 – Elimination of inter-company accounts) Consolidation worksheet D Ltd. E Ltd. Debit Credit Consolidation $000 $000 $000 $000 $000 Goodwill arising on consolidation 28 W1 28 Land 204 140 344 Investment in E Ltd – 8,000 shares 100 W1 100 - – debentures 20 W3 20 - Amount due from E Ltd 100 W4 100 - Current assets 140 180 30 W4 350 564 320 722 Financed by: Ordinary shares @$2 200 20 20 W1 200 Share premium 14 14 Revaluation reserves 40 30 W1 8 2 W2 Retained profits 240 80 40 W1 272 8 W2 NCI W1 18 28 W2 10 Debentures - 30 20 W3 10
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2 Current liabilities 110 80 190 Amount due to D Ltd ___ 70 70 W4 ___ - 564 320 248 248 722 D Ltd and its subsidiary Consolidated statement of financial position as at 31 December Year 4 $000 $000 Goodwill arising on consolidation 28 Land 344 Total non current assets 372 Current assets 350 Total assets 722 Financed by: Ordinary shares @$2 200 Share premium 14 Revaluation reserves 8 Retained profits 272 494 NCI 28 Total equity 522 Debentures 10 Accounts payables 190 Total equity and liabilities 722 Question 2 (Angle &Bangle) Consolidation adjustments: Debit Credit $’000 $’000 Goodwill on consolidation 113 Share capital 200 Freehold property 20 Retained profits – as at 1 January Year 1 210 Investment in Bangle 500 NCI 43 (W1-Elimination of investment in Bangle) Statement of income 9 NCI (90 x 10%) 9 (W2-Current income to NCI)
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3 Angle Group Consolidated statement of financial position as at 31 December Year 1 $’000 ASSETS Non-current assets Freehold property at cost 400 Plant and equipment at cost less depreciation 1,103 Goodwill (working (i))
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This note was uploaded on 02/24/2012 for the course ACT 407 taught by Professor Mshui during the Fall '11 term at The Open University.

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B407F Week 5 Tutorial Solution - B407F Week 5 Tutorial...

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