On 31/12/N, the private statement of financial position of P and S is as follows: (Unit:...

 

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On 31/12/N, the private statement of financial position of P and S is as follows: (Unit: CU1000) Cash Trade receivables Inventories Fixed assets Total assets Trade payables Taxation and payables to the State Other payables Long-term borrowings Share capital Share premium Undistributes profit after tax P Total equity and liabilities 80.000 150.000 180.000 260.000 670.000 60.000 20.000 60.000 70.000 340.000 50.000 70.000 S 670.000 (book value) X1 X2 X4 350.000 X5 X3 X3-15.000 X6 X7 X8 X9 X10 Pan cada ca nean tham X11 S 350.000 (fair value) X2 XI X4+35.000 370.000 X5 X6 X7 X8 Required: 1. Provide appropriate XI to X11 to complete the statement of financial position of S prior to the business combination. The following requirements are independent: 2. P and S were legally merged on 31/12/N, after that only P has existed. P had made the following payments for the net assets of S: - By cash: X12 on 31/12/N; - By goods exchange with fair value of goods: 50,000 (VAT 10% excluded). Cost of goods issued: 45,000. - By bonds issuance: 2,000 5-year bonds at par of 10 and market price of 9.5 per bond. - By share issuance: 300,000 shares at par of 1 and market price of 1.2 per shares. - Consultant fees, revaluation expert fees, auditor fee: 10,000 by cash. - The cost of share issuance: 400 by cash. a. Provide appropriate X12 so that the legal merger had positive goodwill. b. Calculate cost of combination. c. Make journal entries relating these transaction as at 31/12/N. 3. On 31/12/N, P acquired 60% ordinary shares of S and had made the following payments: - By cash: X13 on 31/12/N; By finished goods: with fair value of finished goods: 30,000 (VAT 10% excluded). Cost of goods issued: 25,000. - By share issuance: 500,000 shares at par of 1 and market price of 1.4 per shares. - Consultant fees, revaluation expert fees, auditor fee: 2,000 by cash. a. Provide appropriate X13 so that the acquisition had positive goodwill. b. Calculate cost of combination in P's accounts. c. Prepare the statement of financial position of P after the acquisition. d. Make consolidated journal entries on 31/12/N and prepare the consolidated statement of the group including P and S as at 31/12/N. Knowing that: Income tax rate is at 20% On 31/12/N, the private statement of financial position of P and S is as follows: (Unit: CU1000) Cash Trade receivables Inventories Fixed assets Total assets Trade payables Taxation and payables to the State Other payables Long-term borrowings Share capital Share premium Undistributes profit after tax P Total equity and liabilities 80.000 150.000 180.000 260.000 670.000 60.000 20.000 60.000 70.000 340.000 50.000 70.000 S 670.000 (book value) X1 X2 X4 350.000 X5 X3 X3-15.000 X6 X7 X8 X9 X10 Pan cada ca nean tham X11 S 350.000 (fair value) X2 XI X4+35.000 370.000 X5 X6 X7 X8 Required: 1. Provide appropriate XI to X11 to complete the statement of financial position of S prior to the business combination. The following requirements are independent: 2. P and S were legally merged on 31/12/N, after that only P has existed. P had made the following payments for the net assets of S: - By cash: X12 on 31/12/N; - By goods exchange with fair value of goods: 50,000 (VAT 10% excluded). Cost of goods issued: 45,000. - By bonds issuance: 2,000 5-year bonds at par of 10 and market price of 9.5 per bond. - By share issuance: 300,000 shares at par of 1 and market price of 1.2 per shares. - Consultant fees, revaluation expert fees, auditor fee: 10,000 by cash. - The cost of share issuance: 400 by cash. a. Provide appropriate X12 so that the legal merger had positive goodwill. b. Calculate cost of combination. c. Make journal entries relating these transaction as at 31/12/N. 3. On 31/12/N, P acquired 60% ordinary shares of S and had made the following payments: - By cash: X13 on 31/12/N; By finished goods: with fair value of finished goods: 30,000 (VAT 10% excluded). Cost of goods issued: 25,000. - By share issuance: 500,000 shares at par of 1 and market price of 1.4 per shares. - Consultant fees, revaluation expert fees, auditor fee: 2,000 by cash. a. Provide appropriate X13 so that the acquisition had positive goodwill. b. Calculate cost of combination in P's accounts. c. Prepare the statement of financial position of P after the acquisition. d. Make consolidated journal entries on 31/12/N and prepare the consolidated statement of the group including P and S as at 31/12/N. Knowing that: Income tax rate is at 20%

Answer rating: 100% (QA)

1 X1 135000 X2 120000 X3 110000 X4 130000 X5 50000 X6 15000 X7 30000 X8 40000 X9 300000 X10 40000 X1... View the full answer