Below are the statements of financial position as at 31 March 20*7 and the statements of...
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Below are the statements of financial position as at 31 March 20*7 and the statements of profit or loss for the year ended 31 March 20*7 for the Henderson group (excluding Springdale) and Springdale: Assets Non-current assets Property, plant and equipment Goodwill Investments Current assets Inventory Receivables Cash and cash equivalents Equity and liabilities Issued share capital ($1 shares) Retained earnings Non-current liabilities Current liabilities Trade payables Taxation Statements of financial position as at 31 March 20*7 Henderson group $000 Revenue Cost of sales Gross profit Homework for chapter 3 Operating expenses Profit from operation Finance cost Profit before tax Tax Profit for the year $000 1,860 2,920 4,390 1,240 3,210 69,710 20,000 70,000 159,710 9,170 168,880 50,000 89,430 139,430 25,000 4,450 168,880 $000 23,700 (7,510) 16,190 (3,520) 12,670 (1,000) 11,670 (3,500) 8,170 1,115 1,960 1,870 Statements of profit or loss for the year ended 31 March 20*7 Henderson group $000 1,675 1,900 Springdale $000 89,560 = 89,560 4,945 94,505 40,000 36,930 76,930 14,000 3,575 94,505 Springdale $000 15,900 (6,800) 9,100 (2,240) 6,860 (540) 6,320 (1,880) 4,440 (1) The Henderson group (which consists of Henderson and a wholly-owned (100%) subsidiary) acquired 40% of the equity share capital of Springdale on 1 April 20*2 at a cost of $27 million. At this date the balance on Springdale's retained earnings was $22.45 million. A fair value exercise was carried out but at this time it was determined that the carrying value of Springdale's net assets was a reasonable approximation of their fair value. (2) The Henderson group acquired a further 35% shareholding in Springdale on 1 July 20*6 at a cost of $35 million. At this date, it was determined that the fair value of the original 40% holding in Springdale was $30 million. (3) The investments in Springdale are stated at cost in Henderson's statement of financial position provided. (4) Springdale's profit for the year ended 31 March 20*7 was $4.44 million. Profits are deemed to accrue evenly throughout the year. (5) At 1 July 20*6 non-current assets held by Springdale were determined to have a fair value of $2 million in excess of their carrying value. These assets had a remaining life of 10 years at this date. Depreciation is charged to operating expenses. (6) After 1 July 20*6, Henderson sold goods to Springdale for $2.4 million at a mark-up of 20% on cost. Springdale still held one fifth of these goods at the year-end. At the year-end Henderson's books showed a receivable of $800,000 in respect of the transaction. This disagreed to the corresponding balance in Springdale's books due to cash in transit at the year-end of $50,000. (7) The Henderson group's policy is to value non-controlling interests at acquisition at their fair value. The fair value of the non-controlling interests at 1 July 20*6 was measured at $20 million. (8) As at 31 March 20*7 goodwill on the acquisition of Springdale was reviewed and it was determined that an impairment loss of $1 million should be recorded. The impairment loss should be charged to operating expenses. Required: Prepare the consolidated statement of financial position as at 31 March 20*7 and the consolidated statement of profit or loss for the year ended 31 March 20*7 for the Henderson group. Below are the statements of financial position as at 31 March 20*7 and the statements of profit or loss for the year ended 31 March 20*7 for the Henderson group (excluding Springdale) and Springdale: Assets Non-current assets Property, plant and equipment Goodwill Investments Current assets Inventory Receivables Cash and cash equivalents Equity and liabilities Issued share capital ($1 shares) Retained earnings Non-current liabilities Current liabilities Trade payables Taxation Statements of financial position as at 31 March 20*7 Henderson group $000 Revenue Cost of sales Gross profit Homework for chapter 3 Operating expenses Profit from operation Finance cost Profit before tax Tax Profit for the year $000 1,860 2,920 4,390 1,240 3,210 69,710 20,000 70,000 159,710 9,170 168,880 50,000 89,430 139,430 25,000 4,450 168,880 $000 23,700 (7,510) 16,190 (3,520) 12,670 (1,000) 11,670 (3,500) 8,170 1,115 1,960 1,870 Statements of profit or loss for the year ended 31 March 20*7 Henderson group $000 1,675 1,900 Springdale $000 89,560 = 89,560 4,945 94,505 40,000 36,930 76,930 14,000 3,575 94,505 Springdale $000 15,900 (6,800) 9,100 (2,240) 6,860 (540) 6,320 (1,880) 4,440 (1) The Henderson group (which consists of Henderson and a wholly-owned (100%) subsidiary) acquired 40% of the equity share capital of Springdale on 1 April 20*2 at a cost of $27 million. At this date the balance on Springdale's retained earnings was $22.45 million. A fair value exercise was carried out but at this time it was determined that the carrying value of Springdale's net assets was a reasonable approximation of their fair value. (2) The Henderson group acquired a further 35% shareholding in Springdale on 1 July 20*6 at a cost of $35 million. At this date, it was determined that the fair value of the original 40% holding in Springdale was $30 million. (3) The investments in Springdale are stated at cost in Henderson's statement of financial position provided. (4) Springdale's profit for the year ended 31 March 20*7 was $4.44 million. Profits are deemed to accrue evenly throughout the year. (5) At 1 July 20*6 non-current assets held by Springdale were determined to have a fair value of $2 million in excess of their carrying value. These assets had a remaining life of 10 years at this date. Depreciation is charged to operating expenses. (6) After 1 July 20*6, Henderson sold goods to Springdale for $2.4 million at a mark-up of 20% on cost. Springdale still held one fifth of these goods at the year-end. At the year-end Henderson's books showed a receivable of $800,000 in respect of the transaction. This disagreed to the corresponding balance in Springdale's books due to cash in transit at the year-end of $50,000. (7) The Henderson group's policy is to value non-controlling interests at acquisition at their fair value. The fair value of the non-controlling interests at 1 July 20*6 was measured at $20 million. (8) As at 31 March 20*7 goodwill on the acquisition of Springdale was reviewed and it was determined that an impairment loss of $1 million should be recorded. The impairment loss should be charged to operating expenses. Required: Prepare the consolidated statement of financial position as at 31 March 20*7 and the consolidated statement of profit or loss for the year ended 31 March 20*7 for the Henderson group.
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Consolidated Statement of Comprehensive Income As at March 31 207 Sales Cost of Sales Goss Pr... View the full answer
Related Book For
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
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