Forums › ACCA Forums › ACCA FA Financial Accounting Forums › Please help me find the Goodwill and how to make a CSoFP
- This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
- AuthorPosts
- April 7, 2020 at 5:53 am #566701AnonymousInactive
- Topics: 3
- Replies: 0
- ☆
The statement of financial position as at 31 December 2016 and income statements for the year ended 31 December 2016 for ALPHA Ltd and Beta Ltd are set out below:
Statement of Financial Position as at 31 December 2016
ALPHA LTD
£ BETA LTD
£
Non-current assets
Property, plant and equipment 185,000 39,000
Investment in Beta Ltd 60,000245,000 39,000
Current assets
Inventory 57,500 8,000
Trade receivables 31,600 12,825
Cash and Bank 27,150 6,200
116,250 27,025Current liabilities
Trade payables 67,300 9,275Long-term liabilities
Debentures 25,000 4,000Net Assets 268,950 52,750
Capital and reserves
Share capital 35,000 10,000
Share premium 20,000
Retained profits 213,950
42,750268,950
52,750Income Statements for the year ended 31 December 2016
ALPHA LTD
£ BETA LTD
£
Sales 322,500 38,750
Cost of sales 182,000
21,600Gross profit 140,500 17,150
Operating expenses (60,050)
(10,030)Profit before interest and tax 80,450 7,120
Interest (2,000)
(320)Profit before tax 78,450 6,800
Tax (25,950)
(2,200)Profit after tax 52,500
4,600The following information is relevant to the preparation of the consolidated accounts:
(i) Alpha Ltd acquired 70% of the ordinary £1 shares of Beta Ltd on 1 January 2016 for £60,000 in cash. The balance of the retained profit in Beta Ltd was £38,150 at acquisition. The fair value of Beta Ltd.’s non-current assets (i.e. land) at the date of acquisition was £15,000 higher than their book value. Beta Ltd does not account for this amount in Ltd own accounts.(ii) Alpha Ltd sold goods to Beta Ltd for £15,000 during 2016. The original cost of these goods was £12,000. Half of these goods were included in Beta Ltd.’s closing inventory on 31 December 2015.
(iii) Goodwill arising on acquisition is subjected to an impairment review. For the year ended 31 December 2016, goodwill impairment on acquisition of Beta Ltd was £5,000.
(iv) Non-controlling interest (NCI) is determined using the partial goodwill method.
April 7, 2020 at 8:08 am #566714There is no point in simply typing out a full question and expecting us to provide a full answer.
You must have an answer in the same book in which you found the question, so ask about whatever it is in the answer that you are not clear about – then I will explain.
Everything needed for Paper FA is covered in detail in my free lectures – they are a complete free course.
- AuthorPosts
- The topic ‘Please help me find the Goodwill and how to make a CSoFP’ is closed to new replies.