SOFP – Ammended Past Paper Question.

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    gutsychyk
    Participant
    • Topics: 19
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    Please solve the question below and post your answers not calculations for Total Goodwill, NCI, Reserves and also the figure which balances SOFP!

    Q has been updated to reflect changes introduced by IFRS 3 and the examiner?s recent articles
    On 1 October 2009, Pumice acquired the following non-current investments:
    – 80% of the equity share capital of Silverton at a cost of $13.6 million.
    – 50% of Silverton’s 10% loan notes at par.
    – 1.6 million equity shares in Amok at a cost of $6.25 each.
    The summarised draft balance sheets of the three companies at 31 March 2010 are:
    Pumice Silverton Amok
    $000 $000 $000
    Non-current assets
    Property, plant and equipment 20,000 8,500 16,500
    Investments 26,000 Nil 1,500
    ______ ______ ______
    46,000 8,500 18,000
    Current assets 15,000 8,000 11,000
    ______ ______ ______
    Total assets 61,000 16,500 29,000
    ______ ______ ______
    Equity and liabilities
    Equity
    Equity shares of $1 each 10,000 3,000 4,000
    Retained earnings 37,000 8,000 20,000
    ______ ______ ______
    47,000 11,000 24,000
    Non-current liabilities
    8% Loan note 4,000 Nil Nil
    10% Loan note Nil 2,000 Nil
    Current liabilities 10,000 3,500 5,000
    ______ ______ ______
    Total equity and liabilities 61,000 16,500 29,000
    ______ ______ ______
    The following information is relevant:
    (i) The fair value of Silverton’s assets were equal to their carrying amounts with the exception of land and plant. Silverton’s land had a fair value of $400,000 in excess of its carrying amount and plant had a fair value of $1.6 million in excess of its carrying amount. The plant had a remaining life of four years (straight-line depreciation) at the date of acquisition.
    (ii) In the post acquisition period, Pumice sold goods to Silverton at a price of $6 million. These goods had cost Pumice $4 million. Half of these goods were still in the inventory of Silverton at 31 March 2010. Silverton had a balance of $1.5 million owing to Pumice at 31 March 2010 which agreed with Pumice’s records.
    (iii) The net profit after tax for the year ended 31 March 2010 was $2 million for Silverton and $8 million for Amok. Assume profits accrued evenly throughout the year.
    (iv) An impairment test at 31 March 2010 concluded that consolidated goodwill was impaired by $400,000 and the investment in Amok was impaired by $200,000.
    (v) No dividends were paid during the year by any of the companies.
    (vi) Pumice Group’s policy is to value the non-controlling interest at fair value at the date of acquisition. For this purpose, Silverton’s share price at that date of $5 can be deemed to be representative of the fair value of shares held by the non-controlling interest.
    Required:
    Prepare the consolidated statement of financial position for Pumice as at 31 March 2010.


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    stellak
    Participant
    • Topics: 2
    • Replies: 14

    Total goodwill = 4,200
    NCI = 3,080
    Reserves = 37,720
    SOFP = 67,800


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    gutsychyk
    Participant
    • Topics: 19
    • Replies: 41

    same answer !!

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