Below are the statements of financial position of three companies as at 31 December 2017. Bauble...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Below are the statements of financial position of three companies as at 31 December 2017. Bauble Jewel Gem Co Co Co GHS'000 GHS'000 GHS'000 Non-current assets Property, plant and equipment Investments in group companies 720 60 75 185 100 905 160 75 Current assets 175 90 85 1,080 250 160 Equity Share capital – GHC1 ordinary shares Retained earnings 400 100 50 560 90 70 960 190 115 Current liabilities 120 60 40 1,080 250 160 You are also given the following information: i. Bauble Co acquired 65% of the share capital of Jewel Co on 1" January 2010 and 15% of Gem on 1" January 2011. The cost of the combinations were GHC 140,000 and GHC 45,000 respectively. Jewel Co acquired 80% of the share capital of Gem Co on 1" January 2011. ii. The retained earnings balances of Jewel Co and Gem Co were: 1* January 2010 GHC000 1* January 2011 GHC000 Jewel Co 40 55 Gem Co 35 45 The fair values of Jewel's Property, Plant and Equipment were equal to their book values with the exception of its plant, which had a fair value of GHS 12,000 in excess of its book value at the date of acquisition. The remaining life of all of Jewel's plant at the date of its acquisition was four years and this period has not changed as a result of the acquisition. Depreciation of plant is on a straight-line basis and charged to cost of sales. Jewel has not adjusted the value of its plant as a result of the fair value exercise. iv. Revenues and profits should be deemed to accrue evenly throughout the year. Following an impairment review, there was no impairment loss on any of the consolidated goodwill as at 31* December 2017. V. vi. Gem sells goods to Bauble at cost plus 30%. Bauble had GHS 12,000 of goods in its inventory included in the current assets at 31* December 2017 which had been supplied by Gem. In addition, on 28 December 2017, Gem processed the sale of GHS1,500 of goods to Bauble, which Bauble did not account for until their receipt on 2nd January 2018. The in-transit reconciliation should be achieved by assuming the transaction had been recorded in the books of Bauble before the year end. At 31" December 2017, Gem had a trade receivable balance in the current assets of GHS2,000 due from Bauble which differed to the equivalent balance in Bauble's books due to the sale made on 28 December vii. 2017. viii. It is the group's policy to value the non-controlling interest at acquisition at its proportionate share of the fair value of the subsidiary's identifiable net assets. Required Prepare the consolidated statement of financial position for Bauble Co and its subsidiaries as at 31* December 2017. (20 Marks) Below are the statements of financial position of three companies as at 31 December 2017. Bauble Jewel Gem Co Co Co GHS'000 GHS'000 GHS'000 Non-current assets Property, plant and equipment Investments in group companies 720 60 75 185 100 905 160 75 Current assets 175 90 85 1,080 250 160 Equity Share capital – GHC1 ordinary shares Retained earnings 400 100 50 560 90 70 960 190 115 Current liabilities 120 60 40 1,080 250 160 You are also given the following information: i. Bauble Co acquired 65% of the share capital of Jewel Co on 1" January 2010 and 15% of Gem on 1" January 2011. The cost of the combinations were GHC 140,000 and GHC 45,000 respectively. Jewel Co acquired 80% of the share capital of Gem Co on 1" January 2011. ii. The retained earnings balances of Jewel Co and Gem Co were: 1* January 2010 GHC000 1* January 2011 GHC000 Jewel Co 40 55 Gem Co 35 45 The fair values of Jewel's Property, Plant and Equipment were equal to their book values with the exception of its plant, which had a fair value of GHS 12,000 in excess of its book value at the date of acquisition. The remaining life of all of Jewel's plant at the date of its acquisition was four years and this period has not changed as a result of the acquisition. Depreciation of plant is on a straight-line basis and charged to cost of sales. Jewel has not adjusted the value of its plant as a result of the fair value exercise. iv. Revenues and profits should be deemed to accrue evenly throughout the year. Following an impairment review, there was no impairment loss on any of the consolidated goodwill as at 31* December 2017. V. vi. Gem sells goods to Bauble at cost plus 30%. Bauble had GHS 12,000 of goods in its inventory included in the current assets at 31* December 2017 which had been supplied by Gem. In addition, on 28 December 2017, Gem processed the sale of GHS1,500 of goods to Bauble, which Bauble did not account for until their receipt on 2nd January 2018. The in-transit reconciliation should be achieved by assuming the transaction had been recorded in the books of Bauble before the year end. At 31" December 2017, Gem had a trade receivable balance in the current assets of GHS2,000 due from Bauble which differed to the equivalent balance in Bauble's books due to the sale made on 28 December vii. 2017. viii. It is the group's policy to value the non-controlling interest at acquisition at its proportionate share of the fair value of the subsidiary's identifiable net assets. Required Prepare the consolidated statement of financial position for Bauble Co and its subsidiaries as at 31* December 2017. (20 Marks)
Expert Answer:
Related Book For
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
Posted Date:
Students also viewed these accounting questions
-
The following are the statements of financial position of two companies at 31 October 2018, the end of their most recent financial years: The following additional information is available: 1). On 1...
-
The following are the statements of financial position of Garden plc, its subsidiary Rose Ltd and its associate Petal Ltd: On 1 January 20X3 Garden plc acquired 75% of Rose Ltd for £300,000...
-
The following are summarized statements of financial position of three companies as at December 31, Year 3: The fair values of the identifiable assets and liabilities of the three companies as at...
-
Tory Company sells a single product. Troy estimates demand and costs at various activity levels as follows: How much profit will Troy have if a price of $45 is charged? Units Sold Price Total...
-
While U. S. GAAP allows LIFO inventory costing, IFRS does not. Read paragraphs BC9 through BC21 of IASC, International Accounting Standard 2 Inventories. a. Why did the IASB decide not to allow the...
-
Big Blue University has a fiscal year that ends on June 30. The 2022 summer session of the university runs from June 1 through July 20. Total tuition paid by students for the summer session amounted...
-
Question: The National Football League (NFL) owns the copyright to the broad- casts of its games. It licenses local television stations to telecast certain games and maintains a "blackout rule,"...
-
Mann Hardware has four employees who are paid on an hourly basis plus time-and-a-half for all hours worked in excess of 40 a week. Payroll data for the week ended March 15, 2014, are presented below....
-
Why would a taxpayer need to include IRS Form 8332, Release/Revocation of Claim to Exemption of Child by Custodial Parent, in their personal income tax return? To allow a noncustodial ex-spouse...
-
Problem assignmemnt The newly appointed accountant of a start-up company Pioneer Limited, which has received funding from two sharks jointly in the Shark Tank against the issue of debentures, has...
-
Select a publicly traded firm of your choice that enjoys a large shareholder base. What challenges may this firm have encountered (or is likely to encounter) in terms of (a) Incorporating ethics into...
-
The exercise of judgement is key to attaining audit objectives. Discuss.
-
Establish if Rolls-Royce complies with the main principles of Section A: Leadership.
-
A data set contains only two values. Are the mean, median, and midrange all equal? Explain.
-
What are the main practical differences between the audit risk approach and the business risk approach to auditing?
-
Explain what is meant by the principle of auditor integrity. How do you think we should ensure that the principle is adhered to?
-
I gota 8500 and it's still incorrect. Need help please Moira Company has just finished its first year of operations and must decide which method to use for adjusting cost of goods sold. Because the...
-
Let (x) = x 2 - 9, g(x) = 2x, and h(x) = x - 3. Find each of the following. (((--) 2
-
R. Johnson inherited 810,000 £1 ordinary shares in Johnson Products Ltd on the death of his uncle in 20X5. His uncle had been the founder of the company and managing director until his death....
-
At 31 October 20X0, Lytax Ltd was engaged in various contracts including five long-term contracts, details of which are given below: It is not expected that any customers will default on their...
-
Flash Fashions plc has had a difficult nine months and the management team is discussing strategy for the final quarter. In the last nine months the company has survived by cutting production,...
-
Which one of the below is not a component of the internal control over financial reporting? (a) The management overrides (b) The control environment (c) The companys risk assessment process (d) The...
-
Which of the following is accurate concerning the auditor responsibilities in the performance of preliminary engagement activities? (a) The auditor team leader must conduct the quality control for an...
-
Which of the below assertions is inaccurate concerning analytical procedures? (a) Analytical procedures involve evaluations of financial information through analysis of plausible relationships among...
Study smarter with the SolutionInn App