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I need help with the following question,

Forums › ACCA Forums › ACCA FR Financial Reporting Forums › I need help with the following question,

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  • March 12, 2017 at 2:30 pm #377932
    solwezione
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    • Topics: 1
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    Question 3
    On 30 September 20X0 Gold plc acquired 75% of the equity shares, 30% of the preferred shares and 20% of the bonds in Silver plc and gained control. The balance of retained earnings on 30 September 20X0 was £16,000. The fair value of the land owned by Silver was £3,000 above book value. No adjustment has so far been made for this revaluation.
    The statements of financial position of Gold and Silver at 31 December 20X1 were as follows:
    Gold Silver
    £ £
    ASSETS
    Property, plant and equipment (including land) 82,300 108,550
    Investment in Silver 46,000 —
    Current assets:
    Inventory 23,200 10,000
    Silver current account 20,000
    Bond interest receivable 175
    Other current assets 5,000 7,500
    Total assets 176,675 126,050
    EQUITY AND LIABILITIES
    Equity share capital 60,000 27,600
    Preferred shares 10,000 20,000
    Retained earnings 75,000 21,200
    145,000 68,800
    Non-current liabilities – bonds 12,500 17,500
    Current liabilities
    Gold current account 20,000
    Bond interest payable 625 875
    Other current liabilities 18,550 18,875
    Total equity and liabilities 176,675 126,050
    Notes:
    1 20% of the goodwill is to be written off as an impairment loss.
    2 During the year Gold sold some of its inventor y to Silver for £3,000, which represented cost plus
    a mark-up of 25%. Half of these goods are still in the inventor y of Silver at 31/12/20X1.
    3 There is no depreciation of land.
    4 There has been no movement on share capital since the acquisition.
    5 Method 1 is to be used to compute the non-controlling interest.
    Required:
    Prepare a consolidated statement of financial position as at 31 December 20X1.

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