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Consolidated Financial statement (PIKE AND SALMON)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Consolidated Financial statement (PIKE AND SALMON)

  • This topic has 5 replies, 3 voices, and was last updated 3 years ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • October 30, 2020 at 9:42 am #593510
    poonyisa
    Member
    • Topics: 3
    • Replies: 1
    • ☆

    Pike acquired 75%of the issued share capital of salmon on 1 Jan 20X6 for $8,720,000. In addition, Pike also invested in $1million of Salmon’s 5%loan notes at par value. An extract of financial statement of pike and salmon AS AT 31 march 20X6 is presented below:
    Pike Salmon
    $000 $000
    Equity and liabilities
    share capital
    retained earnings 1,290
    total equity 21,680 6,090
    Non-current liabilities
    5%loan notes20X9 16,440 11,180
    Current liabilities 2,640 1,410

    40,760 18,680

    the following information is relevant to the preparation of the consolidated financial statements:
    (i) at acquisition,the fair value of land owned by salmon exceeded its cost by $1,000,000. This land was still owned at 31Mar20x6.

    (ii) During the post-acquisition period, salmon sold goods to pike for $500,000, on which it earned a margin of 10%.80%of the goods remained in pike’sinventory at the year end. at 31mar20x6 slamon was still owned half of the total amont invoiced to pike for these goods.

    (iii) the fair value of the non-controlling interest in salmon at the date of acquisition was $2,400,000.

    (iv) for the year ended 31mar20x6, salmon made a profitafter tax of 240,000.

    Q: what amount should be inclued in the consolidated statement of financial position for retained earnings at 31 mar20x6?

    how we find the retained earning from the parent company in this case.

    Thank you.

    October 30, 2020 at 9:55 am #593515
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54675
    • ☆☆☆☆☆

    If the 1,290 is the retained earnings of Salmon, then there is not enough information in what you have typed to be able to calculate the retained earnings of Pike.

    If it is a question from the BPP Revision Kit then tell me which question and I can check for myself.

    October 30, 2020 at 3:10 pm #593551
    poonyisa
    Member
    • Topics: 3
    • Replies: 1
    • ☆

    It is a question from Kaplan exam kit, would you be able to help? The question doesnt provide retained earnings of Pike. These are all the question has provided.
    From the answer it showed the figure of $12,480 + (75%*$60)-(75%*$40)PURP.
    I cannot not understand how to find $12,480. Would appreciate if you could help. Thank you.

    October 31, 2020 at 10:44 am #593624
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54675
    • ☆☆☆☆☆

    I am sorry but I have no idea where the $12,480 has come from, and I do not have the Kaplan Exam Kit.
    It seems as though it might be a typing error in the kit.

    March 11, 2022 at 11:13 am #651006
    saraverzin
    Participant
    • Topics: 6
    • Replies: 6
    • ☆

    Hi I know it is a year late but I am having the exact same problem. It seems like there is a mistake here. I have no idea where the 12480 came from.

    March 11, 2022 at 5:01 pm #651043
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54675
    • ☆☆☆☆☆

    As I wrote in my previous post, I am unable to help for the reasons that I explained.

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 total)
  • The topic ‘Consolidated Financial statement (PIKE AND SALMON)’ is closed to new replies.

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