Assignement Questions : Associate

WORKING
1 INVESTMENT IN A
GOODWILL
$000
87,500.00

Consideration Transferred
Fair value at net assets
Share capital
Retained earnings
Fairvalue adjustment - Land
(200-100-80)

100,000.00
80,000.00
20,000.00

(200,000.00)
x 40%

(80,000.00)
7,500.00

2 Group Retained Earnings year end P

P
s Post acqn 96 X 40%

282,500.00
38,400.00
320,900.00

a) Consolidated Income Statement for P group

Revenue
Cost
Profit
share of profit from Associate - A
40% x 96 (w1)
Net profit

$000
1,200,000.00
(1,080,000.00)
120,000.00
38,400.00
158,400.00

b) Statement of Financial Position for P group

Property, Plant and Equipment
Investment in A
(87,500 +38,400)
Current assets
Total assets
Share Capital
Retained earnings (W2)
(282500 + 38, 400)

700,000.00
125,900.00
825,900.00
220,000.00
1,045,900.00
250,000.00
320,900.00
570,900.00

Liabilities

475,000.00
1,045,900.00