Accumulated loss preference dividend Investment in Vent Ltd Elimination of

Accumulated loss preference dividend investment in

This preview shows page 33 - 36 out of 57 pages.

Accumulated loss - preference dividend Investment in Vent Ltd Elimination of investment in Vent Ltd 7 000 4 000 12 600 2 400 20 000 3 000 3 000 (2 400) J3 Retained earnings Non-controlling interests (SFP) Recording of NCI since acquisition to beginning of current year ((20 000 + 3 000 – 12 000) x 20%) 2 200 2 200 2 200 J4 Non-controlling interests (P/L) Non-controlling interests (SFP) Recording of NCI for current year ((17 500 – 1 000) x 20%) 3 300 3 300 3 300 n J5 Preference share capital Retained earnings Non-controlling interests (SFP) Transfer of preference share capital and arrear dividends to NCI as NCI own 100% of the preference shares 10 000 3 000 13 000 13 000 J6 Non-controlling interests (SFP) Retained earnings Recording of arrear preference dividend income paid to non- controlling shareholders 3 000 3 000 (3 000) J7 Non-controlling interests (P/L) Non-controlling interests (SFP) Recording NCI interest in income of preference shareholders (10 000 x 10%) 1 000 1 000 1 000 J8 Non-controlling interests (SFP) Dividend paid Recording of NCI interest in preference dividends paid 1 000 1 000 (1 000) q J9 Share capital Retained earnings Investment in Sol Ltd Non-controlling interests (SFP) Elimination of investment in Sol Ltd 30 000 8 700 29 025 9 675 9 675 J10 Retained earnings Non-controlling interests (SFP) Recording of NCI since acquisition to beginning of current year ((14 200 – 8 700 + 9 000) x 25%) 3 625 3 625 3 625 J11 Non-controlling interests (P/L) Non-controlling interests (SFP) Recording of NCI in current year’s profit ((23 400 + 13 200)) x 25%) 9 150 9 150 9 150
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34 QUESTION 4 (SUGGESTED SOLUTION)(continued) C6 Pro-forma consolidation journals (continued) Dr R Cr R NCI R J12 Impairment of goodwill Goodwill Recording of impairment of goodwill 12 600 12 600 37 750 t J13 Loan to Vent Ltd Retained earnings Reversal of write-down of loan to Vent Ltd 9 000 9 000 J14 Long term borrowings from parent (12 000 + 10 000) Loan to Sol Ltd Loan to Vent Ltd Elimination of intragroup loans 22 000 12 000 10 000
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FAC3704/102 35 QUESTION 5 (32 marks)(58 minutes) The following are the trial balances of Mumbai Ltd, Delhi Ltd and Jaipur Ltd for the year ended 28 February 20.17: Mumbai Ltd Dr/(Cr) R Delhi Ltd Dr/(Cr) R Jaipur Ltd Dr/(Cr) R Share capital: - 525 000 ordinary shares - 90 000 ordinary shares - 75 000 ordinary shares (525 000) - - - (90 000) - - - (75 000) Retained earnings - 1 March 20.16 Gross profit Other income Loan from Mumbai Ltd Trade and other payables Property, plant and equipment Trade receivables Accumulated loss - 1 March 20.16 (497 335) (183 525) (54 500) - (40 470) 460 200 193 466 - - (195 000) - (100 000) (14 320) 162 000 24 184 86 700 (101 250) (189 000) - (50 000) (32 500) 199 700 60 004 - Investments in equity instruments: - Delhi Ltd at cost price 5 000 - - - Jaipur Ltd at cost price 42 000 - - - Other equity investments at fair value 100 000 - - Loan to Delhi Ltd 100 000 - - Loan to Jaipur Ltd 50 000 - - Inventories Other expenses Finance charges Income tax expense Dividends paid – 28 February 20.17 133 943 96 630 - 39 591 80 000 29 300 21 300 10 000 45 836 20 000 76 430 54 300 5 000 36 316 16 000 - - - Additional information 1. On 1 March 20.14, Mumbai Ltd acquired control of Delhi Ltd by acquiring a 60% interest in Delhi Ltd.
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