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I just need help on how to find the shares bought for the consideration of $2000,000 with Encore share capital of $500,000. I will do the rest of the working.
thanks
If I had a BPP Revision Kit, I would help you!
You will need to post the details of the acquisition to me together with the details of Encore’s share capital (from the Encore statement of financial position)
Was the total consideration paid only $2,000,000?
Were there no fair value adjustments to be made to the value of Encore’s assets at date of acquisition?
Do we have no information about the value of the nci’s 25% holding?
From the information that you have given me so far, Reprise’ share of the Encore net assets is $2,332,500 giving a negative goodwill figure of $332,500 ….
…. but that is clearly not necessarily correct and, without full information, I can go no further!
Thanks very just in case you can understand it more here are full notes:
1. $180,000 of the good will should be written off due to impairment losses.
2. Encore shares were at $4.40 just pril to acquisition by Reprise and the price is used to
value non – controlling interest
3. Included in the inventory of Encore are items purchesed from Reprise during the year and the price is $31,,200 Reprise marks up 30% to achieve its selling priceTrust me here when I say …. you’re still not giving me full information
Let me ask you this … please post the introductory paragraph where you’re told about the acquisition by Reprise of the subsidiary Encore.
That’s normally where the key information is given but I would also like you to type the first note that follows the figures given in the question
I also need the date of acquisition and the accounting year end date
In a group account question, One of the requirements is to compute Equity. I am confused. Is NCI part of equity or liability? Please educate me. Thanks
Muldeen – why have you interrupted the vmchishimba thread about the question Reprise?
Tell me, what has your question got to do with the question Reprise?
Post it again, please, on your own thread!
Thanks 🙂
Reprise purchased 75% of $2000,000.00 ten year ago when the balance on it’s retained earning was $1,044,000.
The accounting period is 31st March 20X4 to prepare consolidation .
Note 1- Included in the receivables of Reprise are amounts owed by Encore of $75,000. The current accounts do not at present balance due to a payment for $39,000.00 being in transit at the year end from Encore.
Good Lord, vmchishimba! How could I possibly have helped when only now you give me this information! “….. when the balance on it’s retained earning was $1,044,000.”
Cost for Reprise was $2,000,000
Value of nci was 125 shares x $4.40 = $550,000Total value of Encore at date of acquisition was $2,550,000
Fair value of Encore’s net assets at date of acquisition was:
Shares $500,000
Retained Earnings $1,044,000Total fair value of assets was $1,544,000
Therefore Goodwill was $2,550,000 – $1,544,000 = $1,006,000
From this is deducted the goodwill written off $180,000 leaving an amount in Intangible Non-Current Assets of $826,000
I hope that helps but please, in future, give me full information from your first post
Yes my interest was to know how to find the 125 share only sir otherwise you have done a good job. How are we getting the 125 shares. Which shares are we multiplying with 25% to get 125 shares
You told me early on that Encore’s share capital was $500,000 $1 equity shares and that Reprise bought 75% of them
So Reprise did not buy 25% of the Encore shares and they must still be owned by people other than Reprise.
These people are known as the non-controlling interest
25% x 500,000 $1 equity shares is ….?
Now, vmchishimba, ask yourself the appropriate one from these two alternatives (and answer yourself honestly!)
“Should I have known this having successfully passed F3?”
“Should I have known this having successfully applied for and being granted exemption from F3?”
Next series of questions to ask yourself….
“Have I read through Mike’s course notes?” and
“Did I listen to Mike’s lectures?”
Then, if the answer to either of those is “No”, you need to correct that omission before April is finished
Then, if the answer to both those is “Yes”, you need to go back to John’s lectures for F3 and refresh your memory about basic consolidations
I’ve just noticed that you are studying CAT.
Why on Earth have you posted a question on the Ask ACCA Tutor forum?
There is a separate forum for CAT!
Sorry i did not amend my records. I am studying ACCA my number is 1616999 i can even give you my pass code to check my records. I first wrote F7 in 2014 and scored 43% so i am writing again in June 2016. sorry i did not amend on time. Thanks for help
thanks very much, but all this part I know, i just forgot the SIMPLEST 125 shares for nci only .
Thanks and will be back againif I find a problem.
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