Henry Ltd (H Ltd) is the market leader in the production of internet boxes and Sally...
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Henry Ltd (H Ltd) is the market leader in the production of internet boxes and Sally Ltd (S Ltd) is the main provider of microchips required for the internet boxes production. The statements of financial position (balance sheets) of Henry Ltd and Sally Ltd as at 31 December 2017 are as shown below: H Ltd S Ltd S'000 s'000 Non-current assets Land and building 31,200 10,000 Property, plant and machinery 26.000 57,200 4,000 14,000 Investments Investment in S Ltd 12,250 2.000 Other investments 14,250 Current assets Inventory Trade receivables 1,600 800 800 400 Current account with S Ltd 5,200 9.600 17,200 Cash 6.000 7,200 Current liabilities (1,600) (3,200) (1.600) (6,400) (8,650) Trade payables Current account with H Ltd (4,000) (12,650) Dividends payable 800 4,550 76,000 Total net assets 14,800 Share capital ** Retained earnings Total equity 53,200 22,800 76.000 10,000 4.800 14.800 ** H Ltd and S Ltd have 53,200,000 and 10,000,000 fully paid-up ordinary shares respectively. The following additional information is available: 1. HLtd acquired 70% of the share capital of S Ltd on 1 January 2014 by an exchange of one share in H Ltd plus $0.25 for every share in S Ltd. The retained earnings of S Ltd were $1,200,000 on 1 January 2014. The market price of each H Ltd's share and S Ltd's share at the date of acquisition were $1.5 and $1.2 respectively. 2. On 31 December 2017, S Ltd sent a cheque to H Ltd for $2,000,000. The cheque was not received by H Ltd until 2 January 2018. 3. H Ltd has not included any entries in its accounts relating to the dividends receivable from S Ltd. 4. No goodwill is to be written off after an impairment loss test on goodwill on 31 December 2017. Assume S Ltd would be classified as a subsidiary of H Ltd, prepare (12 marks) the adjusting entries for H Ltd and consolidation journal entries for the H Ltd and S Ltd using the fair value approach to measure the non-controlling interest (NCI). Show clearly the steps and calculations of the amount of goodwill attributable to H Ltd and the non-controlling interest in a separate schedule. Prepare a consolidated statement of financial position (balance (17 marks) sheet) for H Ltd as at 31 December 2017. Show your workings clearly. Henry Ltd (H Ltd) is the market leader in the production of internet boxes and Sally Ltd (S Ltd) is the main provider of microchips required for the internet boxes production. The statements of financial position (balance sheets) of Henry Ltd and Sally Ltd as at 31 December 2017 are as shown below: H Ltd S Ltd S'000 s'000 Non-current assets Land and building 31,200 10,000 Property, plant and machinery 26.000 57,200 4,000 14,000 Investments Investment in S Ltd 12,250 2.000 Other investments 14,250 Current assets Inventory Trade receivables 1,600 800 800 400 Current account with S Ltd 5,200 9.600 17,200 Cash 6.000 7,200 Current liabilities (1,600) (3,200) (1.600) (6,400) (8,650) Trade payables Current account with H Ltd (4,000) (12,650) Dividends payable 800 4,550 76,000 Total net assets 14,800 Share capital ** Retained earnings Total equity 53,200 22,800 76.000 10,000 4.800 14.800 ** H Ltd and S Ltd have 53,200,000 and 10,000,000 fully paid-up ordinary shares respectively. The following additional information is available: 1. HLtd acquired 70% of the share capital of S Ltd on 1 January 2014 by an exchange of one share in H Ltd plus $0.25 for every share in S Ltd. The retained earnings of S Ltd were $1,200,000 on 1 January 2014. The market price of each H Ltd's share and S Ltd's share at the date of acquisition were $1.5 and $1.2 respectively. 2. On 31 December 2017, S Ltd sent a cheque to H Ltd for $2,000,000. The cheque was not received by H Ltd until 2 January 2018. 3. H Ltd has not included any entries in its accounts relating to the dividends receivable from S Ltd. 4. No goodwill is to be written off after an impairment loss test on goodwill on 31 December 2017. Assume S Ltd would be classified as a subsidiary of H Ltd, prepare (12 marks) the adjusting entries for H Ltd and consolidation journal entries for the H Ltd and S Ltd using the fair value approach to measure the non-controlling interest (NCI). Show clearly the steps and calculations of the amount of goodwill attributable to H Ltd and the non-controlling interest in a separate schedule. Prepare a consolidated statement of financial position (balance (17 marks) sheet) for H Ltd as at 31 December 2017. Show your workings clearly.
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Related Book For
Introduction to Operations Research
ISBN: 978-1259162985
10th edition
Authors: Frederick S. Hillier, Gerald J. Lieberman
Posted Date:
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