Haidar ple acquired 75% of Saqib Ltd's ordinary shares on 1 April for an agreed consideration...

 

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Haidar ple acquired 75% of Saqib Ltd's ordinary shares on 1 April for an agreed consideration of Rs. 25 million when Saqib had retained earnings of Rs. 10,200,000. The draft statements of financial position of the two companies at 31 December are: Non-current assets: Property, plant and equipment Investment in S Current assets Inventory Accounts receivable Cash and bank Total assets Equity Share capital Share premium Retained earnings Total SHE Bank loan Current liabilities Accounts payable and accruals Bank overdraft Taxation Total current liabilities Total equity and liabilities H (Rs. 000) 78,540 25,000 7,450 12,960 123,950 30,000 20,000 64,060 114,060 6,000 5,920 2,100 1,870 9,890 123,950 S (Rs. 000) 27,180 4,310 4,330 920 36,740 Required: Prepare a consolidated statement of financial position as at 31 December. 8,000 2,000 15,200 25,200 4,160 1,380 5,540 36,740 The following information is relevant (1) The fair value of Saqib Ltd's land at the date of acquisition was Rs. 4 million in excess of its carrying value. The fair value of Saqib Ltd's other net assets approximated to their carrying values. (ii) During the year Haidar ple sold inventory to Saqib Ltd for Rs. 2.4 million. The inventory had originally cost Haidar plc Rs. 2.0 million. Saqib Ltd held 25% of these goods at the yearend. (iii) The two companies agreed their current account balances as Rs. 500,000 payables by Saqib Ltd to Haidar ple at the year-end. Inter-company current accounts are included in accounts receivable or payable as appropriate. (iv) An impairment test at 31 December on the consolidated goodwill concluded that it should be written down by Rs. 625,000, Haidar ple acquired 75% of Saqib Ltd's ordinary shares on 1 April for an agreed consideration of Rs. 25 million when Saqib had retained earnings of Rs. 10,200,000. The draft statements of financial position of the two companies at 31 December are: Non-current assets: Property, plant and equipment Investment in S Current assets Inventory Accounts receivable Cash and bank Total assets Equity Share capital Share premium Retained earnings Total SHE Bank loan Current liabilities Accounts payable and accruals Bank overdraft Taxation Total current liabilities Total equity and liabilities H (Rs. 000) 78,540 25,000 7,450 12,960 123,950 30,000 20,000 64,060 114,060 6,000 5,920 2,100 1,870 9,890 123,950 S (Rs. 000) 27,180 4,310 4,330 920 36,740 Required: Prepare a consolidated statement of financial position as at 31 December. 8,000 2,000 15,200 25,200 4,160 1,380 5,540 36,740 The following information is relevant (1) The fair value of Saqib Ltd's land at the date of acquisition was Rs. 4 million in excess of its carrying value. The fair value of Saqib Ltd's other net assets approximated to their carrying values. (ii) During the year Haidar ple sold inventory to Saqib Ltd for Rs. 2.4 million. The inventory had originally cost Haidar plc Rs. 2.0 million. Saqib Ltd held 25% of these goods at the yearend. (iii) The two companies agreed their current account balances as Rs. 500,000 payables by Saqib Ltd to Haidar ple at the year-end. Inter-company current accounts are included in accounts receivable or payable as appropriate. (iv) An impairment test at 31 December on the consolidated goodwill concluded that it should be written down by Rs. 625,000,

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To prepare a consolidated statement of financial position as of 31 December we need to consolidate t... View the full answer