What is the fair value of the consideration

What is the fair value of the consideration transferred for the acquisition of Sardonic?
A $103.5 million
B $69 million
C $155.25 million
D $92 million
(2 marks)

F3/FFA FINANCIAL ACCOUNTING
128
26.25 X Co acquired 80% of the equity share capital in Y Co on 31 July 20X6. Extracts from the two
companies' statements of profit or loss for the year ended 30 September 20X6 were as follows:
X Co Y Co
$'000 $'000
Revenue 3 400 2 400
Cost of sales 1 500 1 800
During the year ended 30 September 20X6, Y Co sold goods for $5 000 each month to X Co, at a mark
up of 25%. At the end of the year X Co had 50% of these goods left in inventory.
What is the group gross profit for the year ended 30 September 20X6?
A $1,901,000
B $1,999,000
C $2,004,000
D $1,904,000 (2 marks)
26.26 WX acquired 75% of the equity share capital of YZ several years ago. At 31 March 20X6 WX had goods
in inventory valued at cost of $60,000, that had been purchased from YZ at a mark-up of 20%.
What is the effect on the profit attributable to the non-controlling interest, and the profit attributable to
the parent company for the year ended 31 March 20X6?
Profit attributable to non-controlling interest Profit attributable to WX
A no effect decrease by $5,000
B no effect decrease by $12,000
C decrease by $3,000 decrease by $9,000
D decrease by $2,500 decrease by $7,500
(2 marks)
26.27 P owns 80% of the equity share capital of S The profit after tax of S for the year ended 31 December
20X6 was $60 million. During 20X6, P sold goods to S for $4 million at cost plus 20%. At the year end
50% of these goods were left in the inventory of S.
What is non-controlling interest share of the after-tax profit of S for the year ended 31 December 20X6?
A $11.36 million
B $11.6 million
C $11.68 million
D $12 million (2 marks)
(Total = 54 marks)

QUESTIONS
129
Check that you can fill in the blanks in the statements below before you attempt any questions. If in doubt,
you should go back to your BPP Interactive Text and revise first.
x Users of financial statements can gain a better understanding of the s …………… of the information in
financial statements by comparing it with other r …………… information.
x Ratios provide information through ……………….
x P ……………… ratios include:
– Return on capital employed
– Net ………… as a percentage of sales
– ……… turnover ratio
– G ……… profit as a percentage of sales
x Liquidity and working capital ratios include:
– ……………… ratio
– ……………… ratio
– Accounts ……………… collection period
– Accounts ……………… payment period
– ……………… inventory ……………… period
x Debt and g ……………… /leverage ratios include:
– Debt ratios
– G …………..… ratio/leverage
– I ……………… cover
Do you know? – Interpretation of financial statements

F3/FFA FINANCIAL ACCOUNTING
130
Could you fill in the blanks? The answers are in bold. Use this page for revision purposes as you approach
the exam.
x Users of financial statements can gain a better understanding of the significance of the information in
financial statements by comparing it with other relevant information.