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Good Morning Sir,
Q29 from BPP practice & revision Kit,
Consolidated statements question:
On 1April 20x8m Pedantic acquired 60% of the equity share capital of Sophistic in a share exchange of two shares in Pedantic for three shares in Sophistic. The issue of shares has not yet been recorded by Pedantic. At the date of acquisition shares in Pedantic has a market value of $6 each.In answer when preparing CSFP, why they have added share capital of Pedantic 600 x $1 and share premium of Pedantic 1,600 x $5 when we know it is Always, only and ever Share capital of Parent?
The question does not mention share premium anywhere? Confused.
Thanks
Do the Pedantic shares have a face value of $1? (Look in the Pedantic statement of financial position)
If they have a face value of $1 and they’re issued at a premium with a calculated market value of $6, what do you think the difference of $5 might be called?
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