Papilla acquired 70% of Satago three years ago, when Satago's retained earnings were $430,000. The Financial...
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Papilla acquired 70% of Satago three years ago, when Satago's retained earnings were $430,000. The Financial Statements of each company for the year ended 31 Marh2017 are as follows: Statements of Financial Position as at 31 March 2017 Non-Current Assets Property, plant & equipment Investment in S at cost Current Assets Share capital $1 Share Premium Retained Earnings Non-Current Liabilities Current Liabilities Revenue Cost of Sales Gross Profit Operating expense Profit from operations Finance Cost Investment Income Profit Before Tax Tax Profit for the year (60) 190 25 20 185 Papilla $ (100) 85 900 700 300 1900 200 50 1350 1600 100 200 1900 Statements of profit or loss for the year ended 31 March 2017 P company S S company S 1000 260 (750) (80) 250 180 (35) 145 15 Satago 130 (30) 100 400 600 1000 150 700 850 90 60 1000 You are provided with the following additional information: (i)Satago had plant in its Statement of Financial Position at the date of acquisition with a carrying value of $100,000 but a fair value of $120,000. The plant had a remaining life of 10 years at acquisition. Depreciation is charged to cost of sales. (ii) The Papilla group values the non-controlling interests at fair value. The fair value of the non- controlling interests at the date of acquisition was $250,000. Goodwill is to be impaired by 30% at the reporting date, of which one third related to the current year. (iii)At the start of the year Papilla transferred a machine to Satago for $15,000. The asset had a remaining useful economic life of 3 years at the date of transfer. It had a carrying value of $12,000 in the books of Papilla at the date of transfer. (iv)During the year Satago sold some goods to Papilla for $60,000 at a mark-up of 20%. 40% of the goods remained unsold at the year-end. At the year-end, Satago's books showed a receivables balance of $6,000 as being due from Papilla. This disagreed with the payables balance of $1,000 in Papilla's books due to Papilla having sent a cheque to Satago shortly before the year end which Satago had not yet received. (v) Satago paid a dividend of $20,000 on 1 March 2017. Required: i. Prepare the consolidated statement of financial position as at 31 March 2017. ii. Prepare the consolidated statement of financial performance for the year ended 31 March 2017 Papilla acquired 70% of Satago three years ago, when Satago's retained earnings were $430,000. The Financial Statements of each company for the year ended 31 Marh2017 are as follows: Statements of Financial Position as at 31 March 2017 Non-Current Assets Property, plant & equipment Investment in S at cost Current Assets Share capital $1 Share Premium Retained Earnings Non-Current Liabilities Current Liabilities Revenue Cost of Sales Gross Profit Operating expense Profit from operations Finance Cost Investment Income Profit Before Tax Tax Profit for the year (60) 190 25 20 185 Papilla $ (100) 85 900 700 300 1900 200 50 1350 1600 100 200 1900 Statements of profit or loss for the year ended 31 March 2017 P company S S company S 1000 260 (750) (80) 250 180 (35) 145 15 Satago 130 (30) 100 400 600 1000 150 700 850 90 60 1000 You are provided with the following additional information: (i)Satago had plant in its Statement of Financial Position at the date of acquisition with a carrying value of $100,000 but a fair value of $120,000. The plant had a remaining life of 10 years at acquisition. Depreciation is charged to cost of sales. (ii) The Papilla group values the non-controlling interests at fair value. The fair value of the non- controlling interests at the date of acquisition was $250,000. Goodwill is to be impaired by 30% at the reporting date, of which one third related to the current year. (iii)At the start of the year Papilla transferred a machine to Satago for $15,000. The asset had a remaining useful economic life of 3 years at the date of transfer. It had a carrying value of $12,000 in the books of Papilla at the date of transfer. (iv)During the year Satago sold some goods to Papilla for $60,000 at a mark-up of 20%. 40% of the goods remained unsold at the year-end. At the year-end, Satago's books showed a receivables balance of $6,000 as being due from Papilla. This disagreed with the payables balance of $1,000 in Papilla's books due to Papilla having sent a cheque to Satago shortly before the year end which Satago had not yet received. (v) Satago paid a dividend of $20,000 on 1 March 2017. Required: i. Prepare the consolidated statement of financial position as at 31 March 2017. ii. Prepare the consolidated statement of financial performance for the year ended 31 March 2017
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Consolidated Statement of Financial Position Particulars Goodwill WN ... View the full answer
Related Book For
Advanced Accounting
ISBN: 9780132568968
11th Edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith
Posted Date:
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