Consolidated Financial Statements

Relationship between Parent and Subsidiary is Gold (Parent) and Silver (Subsidiary)

Gold acquired 30% of Bronze's share capital also

 

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Question 1- 40 marks Gold plc, Silver plc and Bronze Ltd have produced the following statements of financial position as at 31st March 2021: ASSETS Non-current assets Property, plant and equipment (at NBV) Cost of Investment in Silver Cost of Investment in Bronze Total non-current assets Current assets Inventories Trade receivables Bank Total current assets Total assets EQUITY AND LIABILITIES Equity Equity shares of £1 each General reserve Retained earnings Total equity Non-current liability: Loan Current liabilities Trade payables Bank overdraft Total current liabilities Total equity and liabilities Gold £m 2,100 800 120 3,020 880 580 280 1,740 4.760 2,400 60 800 3,260 400 1,100 Nil 1,100 4,760 Silver £m 480 Nil Nil 480 280 420 8 708 1.188 680 10 190 880 Nil 228 80 308 1.188 Bronze £m 237 Nil Nil 237 108 108 18 234 471 150 36 150 336 Nil 102 33 135 471 The following information is also available: 1) On 1st October 2010, Gold acquired 80% of the ordinary share capital of Silver when Silver's retained earnings were £72 million, and their general reserve was £4 million. 2) At the date of acquisition, Silver's property, plant and equipment was considered to have a fair value of £40 million more than the book value. This has increased depreciation, since acquisition and up to 31st March 2021, by £32 million. 3) At the date of acquisition, the market value of Silver's shares was £1.30 per share. 4) It is the group's policy to value the non-controlling interest at fair value. Question 1- 40 marks Gold plc, Silver plc and Bronze Ltd have produced the following statements of financial position as at 31st March 2021: ASSETS Non-current assets Property, plant and equipment (at NBV) Cost of Investment in Silver Cost of Investment in Bronze Total non-current assets Current assets Inventories Trade receivables Bank Total current assets Total assets EQUITY AND LIABILITIES Equity Equity shares of £1 each General reserve Retained earnings Total equity Non-current liability: Loan Current liabilities Trade payables Bank overdraft Total current liabilities Total equity and liabilities Gold £m 2,100 800 120 3,020 880 580 280 1,740 4.760 2,400 60 800 3,260 400 1,100 Nil 1,100 4,760 Silver £m 480 Nil Nil 480 280 420 8 708 1.188 680 10 190 880 Nil 228 80 308 1.188 Bronze £m 237 Nil Nil 237 108 108 18 234 471 150 36 150 336 Nil 102 33 135 471 The following information is also available: 1) On 1st October 2010, Gold acquired 80% of the ordinary share capital of Silver when Silver's retained earnings were £72 million, and their general reserve was £4 million. 2) At the date of acquisition, Silver's property, plant and equipment was considered to have a fair value of £40 million more than the book value. This has increased depreciation, since acquisition and up to 31st March 2021, by £32 million. 3) At the date of acquisition, the market value of Silver's shares was £1.30 per share. 4) It is the group's policy to value the non-controlling interest at fair value.

Answer rating: 100% (QA)

a The consolidated statement of financial position of the Gold Group as at 31 March 2021 would be as follows Gold Group Consolidated statement of fina... View the full answer