You are the financial director of Dawn Ltd ( Dawn ) , the parent company of the
Fantastic news! We've Found the answer you've been seeking!
Question:
You are the financial director of Dawn Ltd Dawn the parent company of the Dawn group. All companies within the groups reporting date is December.
Extract of the trial balances as at December of the groups companies listed below:
dawn Ltd Horizon Ltd
Share capital, at N$ for each share
Share capital, at N$ for each share
Retained earnings, January
General reserve
Investment in shares ofHorizon at cost
Property, plant and equipment
Other investments
Inventory
Accounts receivable
Bank
Accounts payable
Long term liabilities
Revenue
Cost of sales
Expenses
Income tax expense
Profit before tax for the year
Extract of Retained Earnings in the statement of changes in equity for the year ending December of the groups companies listed below:
Dawn Ltd Horizon Ltd
Retained earning Retained earning
Balance January
Profit for the year
Transfer to general reserve
Dividends declared
Balance December
Additional Information
Dawn acquired its shareholding in Horizon Ltd Horizon on June when the general reserve and the retained earnings were N$ and N$ respectively.
Assume that the identifiable assets and liabilities acquired at acquisition date are shown at their acquisitiondate fair values, as determined in terms of IFRS Business combinations. Dawn elected to measure any noncontrolling interests in Horizon at its proportional share of Horizons identifiable net assets at acquisition date.
Dawn classifies the equity investments in Horizon at cost in accordance with IFRS Financial instruments.
Revenue is calculated on a gross profit percentage of
Expenses includes:
o Depreciation on the property, plant and equipment which is calculated using the per year diminishing value method. Depreciation is classified as an administrative expense.
o Finance costs on the long term loans of N$ and N$ for the parent and subsidiary respectively.
o The remaining costs are other expenses.
You should use the income tax figures indicated above and dont have to recalculate the income tax expense.
Required
a Prepare all the proforma consolidation journal entries to incorporate Horizon Pty Ltd into the Dawn Ltd group for the year ended December Journal narrations are not required.
b Prepare a Statement of profit or loss and other comprehensive income for the year ended December of the Dawn group in accordance with IFRS. One mark will be allocated for Presentation Skill. Notes and comparative figures are not required. The revenue, cost of sales, gross profit and different income and various expense items needs
to be clearly indicated on the Statement of profit or loss and other comprehensive income for the year.
Related Book For
Modern Advanced Accounting In Canada
ISBN: 9781259066481
7th Edition
Authors: Hilton Murray, Herauf Darrell
Posted Date: