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- This topic has 3 replies, 3 voices, and was last updated 6 years ago by John Moffat.
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- January 26, 2015 at 10:20 am #223771
Wallace, a limited liability company acquired 60% of the voting share capital of Bruce on 1 February 20X8.
You are presented with the following information for Wallace, a limited liability company, and its subsidiary, Bruce. The income and expenses of Bruce accrued evenly over the year.
Statements of profit or loss for the year ended 31 October 20X8
Wallace Bruce
$’000 $’000
Profit before tax 16,406 10,300
Less: Income tax expense 3,700 2,100
Profit for the year 12,706 8,200Statements of financial position as at 31 October 20X8
Wallace Bruce
$’000 $’000
Non-current assets:
Tangible 29,860 14,895
Investment 9,000 0
38,860 14,895
Current assets
12,010 11,697
50,870 26,592
Ordinary shares
26,000 5,000
Retained earnings
14,145 15,210
40,145 20,210
Current liabilities
10,725 6,382
50,870 26,592
(1)Wallace purchased its 60% of Bruce’s 10 million $0.50 nominal value ordinary shares on 1 February 20X8 for $1.50 per share. This was the market value of the shares at this date.
(2)
At 1 February 20X8 the retained earnings of Bruce were $9,060,000.
(3)
The fair value of the non-controlling interest in Bruce was determined using the market value share price.What is the total consolidated profit for the year in the consolidated statement of profit or loss for the year ended 31 October 20X8?
50870+26592*6/12-(10000*0.5+10000)= 49166 (Is this the answer?)
What should the tangible non-current assets figure be in the consolidated statement of financial position as at 31 October 20X8?
29860+14895*6/12= 37307.05 (Is this the answer?)
Unfortunately, I do not any option for answers.
Thank you in advance!
January 26, 2015 at 10:28 am #223775I have no idea how you are getting your consolidated profit.
Wallace made a profit of 12,706 and Bruce made a profit of 8,200. So you need to take Wallace’s profit and then add their share of Bruce’s profit since acquisition.
Non-current assets is simply the total of the two – there is no logic in apportioning them.
(There really is no point in attempting questions for which you do not have answers. You must get a Revision Kit from one of the ACCA approved publishers. The whole point in attempting questions is to be able to learn from your mistakes when checking the answers.
You cannot expect us to provide the answers to all the questions in your book.)July 24, 2018 at 9:57 am #464456Mr John Moffat Sir can you please explain how to find Bruce’s profit since acquisition? I couldn’t find it
July 24, 2018 at 4:04 pm #464499Please read the last paragraph of my answer in 2015 🙂
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