[haji89]

They are F7 questions Mr.Francis Braganza has been teaching online

[haji89]

Thank you so much

[haji89]

Oh! Thank you so much.i have never thought from that angle

[haji89]

I meant subsidiary buying another company

[haji89]

Thank you sir

[haji89]

Thank you sir

[haji89]

Hello Mike

You are told “included in the trade receivable of H ltd(parent) is $ 120 due from S ltd (sub).S Ltd included only $70 of this amount in its trade payable. The difference is due to administrative expenses charged to S ltd by H ltd which had not been accounted for by S Ltd”who can treat this on consolidation?

Thank you

[haji89]

Hello sir,
@
When you are told” included in the trade receivable of H ltd (parent ) is $120 due from S ltd (sub).S Ltd included only $70 of this amount in its trade payable.the difference is due to admininstrave expenses charged to S Ltd by H lted which had not been accounted for by S ltd”.who would you treat it?

[haji89]

H Ltd
Non Current assets $ $
Tangible-PPE 50,000
Investment in S Ltd OSC 12,000
PSC 10,000
Loan stock 5,000 27,000
77,000
Current assets
Inventory 12,000
Receivables 8,000
Cash at bank 3,000 23,000
TOTAL ASSETS 100,000

Equity and Liability
Share Capital OSC 50,000
PSC 10,000
Retained Profits 20,000
80,000
Non Current Liabilities
10% Loan Stock 10,000

Current Liabilities
Account Payable 10,000
TOTAL EQUITY AND LIABILITY 100,000

S Ltd

Non Current assets : $ $
Tangible-PPE 40,000
40,000
Current assets
Inventory 10,000
Account receivables 4,000
Cash at bank 2,000 16,000
TOTAL ASSET 56,000

Equity and Liability

Share Capital OSC 30,000
PSC 12,000
Retained Profits 4,000
46,000

Non Current Liabilities
10% Loan Stock 6,000

Current Liabilities
Account Payable 4,000
TOTAL EQUITY AND LIABILITY 56,000

[haji89]

Subsidiary’s assets at:

Acquisition: ordinary share capital-30,000
Retained earning- 1,000
TOTAL 31,000

Consolidation: Ordinary share capital-30,000
Retained Earning- 4,000
TOTAL 34,000

GOODWILL:
Parent’s investment @ cost- 27,000
NCI’s at fair value at acquisition
40%30,000 12,000
Less: sun’s net asset @ fv @acq-(31,000)
Goodwill in csfp 8,000

NCI
NCI @ fair value @ acquis- 12,000
NCI %tage of post acqui reserve
40%×(34,000-31,000) 1,200
NCI in csfp 13,200

CONSOLIDATED RESERVES
Parent’s own reserve now 20,000
parent’s %tage of post acqu reser
60%×3,0000 1,800
Consolidated reserv in csfp 21,800

[haji89]

I typed it well but when i loaded I saw mix up of details belonging to H ltd,the acquirer, and S ltd the subsidiary.the figures at the extreme right belongs to subsidiary.

I would like you to help me workout the big three I.e goodwill,NCI and consolidated reserves.

can I send my question via email?

[haji89]

H ltd acquired 60% of ordinary share capital of S ltd when retained earning amounted to $ 1000,40% of preference share capital and part of 10% loan

H ltd S ltd
Tangibe assets 50,000 40,000
investment in s:osc 12,000
pref sh.10,000
stock loan 5,000
Total 77,000 40,000

current assets
inventory 12,000 10,000
receivables 8,000 4,000
bank 3,000 23,000 2,000 16,000
Total assets 100,000 56,000

Equity
Osc 50,000 30,000
Preference share 10,000 12,000
Retained profit 20,000 4,000
Total 80,000 46,000

Non current liabilities
10% loan stock 10,000 6,000

Current liabilities
Payable 10,000 4,000
Total Equity & liability 100,000 56,000

Required: consolidated statement of H ltd and it subsidiary S ltd as at Dec 2012

[haji89]

i can’t download both notes and lectures

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