Finance charges Income tax expense After tax effect of unrealised profit in

Finance charges income tax expense after tax effect

This preview shows page 9 - 12 out of 57 pages.

Finance charges Income tax expense After-tax effect of unrealised profit in inventory [(3 000(18 000 x 20 / 120 ) – (840(3 000 x 28%))] 248 000 (149 000) 6 500 (35 000) (5 000) (18 340) 47 160 (2 160) 45 000 C4 Analysis of owners’ equity of Crow Ltd 100% Dune Ltd 80% 20% Total R At R Since R NCI R At acquisition Share capital Retained earnings 50 000 349 000 40 000 279 200 10 000 69 800 Equity represented by goodwill 399 000 5 800 319 200 5 800 a 79 800 - Consideration and NCI 404 800 325 000 79 800 Since acquisition Accumulated loss (249 000 – 349 000) (100 000) (80 000) b (20 000) Current year Profit for the year (C3) Dividends paid Other comprehensive income – fair value adjustment on investment in equity instruments (Mark-to-market reserve)(given) 45 000 (6 000) 3 880 36 000 (4 800) f 3 104 59 800 c 9 000 d (1 200) e 776 n 347 680 (45 696) 68 376 g C5 Proof of goodwill of Crow Ltd (IFRS 3.32) R Consideration transferred at acquisition date Non-controlling interests ((50 000 + 349 000) x 20%) 325 000 79 800 Net amount of identifiable assets acquired and liabilities assumed at acquisition date (50 000 + 349 000) 404 800 (399 000) Goodwill 5 800
Image of page 9
10 QUESTION 1 (SUGGESTED SOLUTION)(continued) C7 Analysis of owners’ equity of Berry Ltd 100% Dune Ltd 60% 40% Total R At R Since R NCI R At acquisition Share capital Retained earnings Revaluation of land (C2) 25 000 260 000 43 000 15 000 156 000 25 800 10 000 104 000 17 200 Equity represented by gain on bargain purchase 328 000 (1 300) 196 800 (1 300) h 131 200 i - Consideration and NCI 326 700 195 500 131 200 Current year Profit for the year 1 Dividends paid 42 840 (10 000) 25 704 (6 000) m 17 136 j (4 000) k 359 540 19 704 144 336 l 1 Profit for the year R Revenue Cost of sales Other expenses Income tax expense 190 000 (85 500) (45 000) (16 660) 42 840 C8 Proof of gain on bargain purchase of Berry Ltd (IFRS 3.32) R Consideration transferred at acquisition date Non-controlling interests (25 000 + 260 000 + 43 000(C2) x 40%) 195 500 131 200 Net amount of identifiable assets acquired and liabilities assumed at acquisition date (25 000 + 260 000 + 43 000(C2)) 326 700 (328 000) Gain on bargain purchase (1 300) C9 Pro-forma consolidation journals Dr R Cr R NCI R J1 Revenue Cost of sales Elimination of intragroup sales 18 000 18 000 J2 Cost of sales Deferred tax Inventories Income tax expense Elimination of intragroup profit included in inventories (C1) 3 000 840 3 000 840 J3 Other income (management fee received) Other expenses (management fee paid) Elimination of intragroup management fees paid 10 000 10 000 J4 Other income (interest received) Finance charges (interest paid) Elimination of intragroup interest paid 5 000 5 000
Image of page 10
FAC3704/102 11 QUESTION 1 (SUGGESTED SOLUTION)(continued) Dr R Cr R NCI R J5 Property, plant and equipment Revaluation surplus Deferred tax Revaluation of land (C2) 55 412 43 000 12 412 J6 Share capital Retained earnings Revaluation surplus Other income (gain on bargain purchase) Investment in Berry Ltd Non-controlling interests (SFP) Elimination of owners’ equity at acquisition of Berry Ltd 25 000 260 000 43 000 1 300 h 195 500 131 200 131 200 i J7 Share capital Retained earnings Goodwill Investment in Crow Ltd Non-controlling interests (SFP) Elimination of owners’ equity at acquisition of Crow Ltd 50 000 349 000 5 800 a 325 000 79 800 79 800 J8 Non-controlling interests (SFP) Accumulated loss – beginning of year Recording of non-controlling interests in accumulated loss – beginning of year since acquisition of Crow Ltd ((249 000 – 349 000) x 20%) 20 000
Image of page 11
Image of page 12

You've reached the end of your free preview.

Want to read all 57 pages?

  • Spring '16
  • Balance Sheet, NCI, Generally Accepted Accounting Principles, Sydney Ltd, York Ltd, Crow Ltd

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors