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[solution] » 1 [45 marks] P acquired 80% of S on 1 December 2012 paying N$4.25

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1 [45 marks] P acquired 80% of S on 1 December 2012 paying N$4.25
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1 [45 marks]

P acquired 80% of S on 1 December 2012 paying N$4.25 in cash per share. At this stage the balance on S?s retained earnings were N$ 870 000. On March 2015 P acquired 30% of A?s ordinary shares. The consideration was settled by share exchange of 4 new shares in P for every 3 shares acquired in A. The share price of P at the date of acquisition was N$ 5.00. P has not yet recorded the acquisition of A in its books

The Statement of Financial Position for three companies as at 30 November 2015 is as follows

P S A

000 000 000

Non-current Assets

Property 1300 850 900

Plant & Equipment 450 210 150

Investment 1825 0 0

Current Assets

Inventory 550 230 200

Receivables 300 340 400

Cash 120 50 140

4545 1680 1790

Share capital N$1 1800 500 250

Share premium 250 80 0

Retained Earnings 1145 400 1200

3195 980 1450

Non ? current Liabilities

10% Loan notes 500 300 0

Current Liabilities

Trade Payables 520 330 250

Income Tax 330 70 90

4545 1680 1790 TUTORIAL LETTER SEMESTER 2/2016 FINANCIAL ACCOUNTING 320 GFA712S

17

The following information is relevant

?

As at December 2012, plant in the books of S was determined to have a fair value of N$ 50 000 in excess of its carrying value. The plant had a remaining life of 5 years at this time

? During the year, S sold goods to P for N$ 400 000 at a mark-up of 25%. P had a quarter of these goods still in inventory at the year end

? In September A Sold goods to P for N$ 150 000. These goods had cost A N$ 100 000. P had N$90000( at cost to P) in inventory at the year ?end

? AS a result of the above intercompany sales, P?s books showed N$50 000 and N$20000 as owing to S and A respectively at the year-end. These balances agreed with the amounts recorded in S?s and A?s books

? Non ?controlling interests are measured using the proportion of net assets method. Goodwill is to be impaired by 30% at the reporting date. An impairment review found the investment in associate was to be impaired by N$ 15000 at the year-end

? A ?s profit after tax for the year is N$ 600,000

Required:

Prepare the Consolidated Statement of Financial Position as at 30 November 2015

 







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