Goodwill at acquisition was calculated to be $60,000. The total assets in the consolidated statement of financial position as of December 31, 2019, were calculated to be $6,865,000. You are required to show workings for the following: 1. Provision for unrealized profit 2. Non controlling interest at the reporting date 3. Group Retained earning at the reporting date. Financial statements

Goodwill at acquisition was calculated to be $60,000. The total assets in the consolidated statement of financial position as of December 31, 2019, were calculated to be $6,865,000. You are required to show workings for the following:

1. Provision for unrealized profit

2. Non controlling interest at the reporting date

3. Group Retained earning at the reporting date.

Financial statements are attached in the SS
 

Transcribed Image Text:

1. The following are statements of financial position as at December 31, 2019, of three companies, Liz, Di and Kit. Di Co. and Kit Co. are investee companies of Liz Co. Assets Non-current assets Land and buildings Plant and equipment Investments Current assets Inventories Account receivables Cash Equity and liabilities Equity Share capital ($1 ordinary shares) Retained earnings Non-current liabilities 12% debentures Current liabilities Bank overdraft Account payables Liz $000 1,950 795 1,500 4,245 575 330 50 955 5,200 2,000 1,460 3,460 500 560 680 1,740 5,200 Di $000 1,250 375 1,625 300 290 120 710 2,335 1,000 885 1,885 100 350 450 2,335 Kit $000 500 285 785 265 370 20 655 1,440 750 390 1,140 300 300 1,440 The following additional information is available: i. Liz Co. acquired 600,000 ordinary shares in Di Co on January 1, 2014 for $1,000,000 when the accumulated retained earnings of Di Co were $200,000. ii. At the date of the acquisition of Di Co, the fair value of its land and buildings was considered to be $400,000 greater than its value in Di Co.'s statement of financial position. Di Co had acquired the property ten years earlier and the buildings element (comprising 50% of the total value) is depreciated on cost over 50 years. iii. Liz Co acquired 225,000 ordinary shares in Kit Co on January 1, 2018 for $500,000 when the retained profits of Kit Co were $150 000

Expert Answer

1. Provision for unrealized profit = Sales value of inventory unsold - cost of inventory unsold = 10 View the full answer