Bangladesh University of Professionals (BUP)

Dept. of Business Administration in Accounting and Information Systems

Course: Advanced Financial Accounting-II (ACT-2201)
Mid-Term Examination(July-Dec 2020)

Time: 1 Hour Total Marks: 20

(Answer all the Questions)

1. The following are the summarized statements of financial position of a group of (14)
companies as at 31st December 2019.

Particular ABC Ltd. XYZ Ltd.

(Amount in Tk.) (Amount in Tk.)
Non-Current Asset
Property Plant Equipment 238,000 65,000
Investment (48,000 Tk. 1 Shares in XYZ Ltd.) 67,000
Current Assets 45,000 35,000
Total Assets 350,000 100,000

Equity & Liabilities

Share Capital (Tk. 1 Ordinary) 205,000 60,000
Retained Earnings 73,000 25,000
Total Equity 278,000 85,000
Liabilities 72,000 15,000
Total Equity & Liabilities 350,000 100,000

ABC Ltd. acquired its shares in XYZ Ltd. during the year, when retained earnings were
Tk. 12,500. At the end of 2019, the goodwill impairment review revealed a loss of Tk.
3,000 in relation to the acquisition of XYZ Ltd.

Requirement:
Prepare the consolidated statement of financial position of ABC Ltd. at 31st December
2019.
2. The summarized statements of financial position of ABM Ltd. and MLP Ltd. at 31st (4)
December 2018 were as follows.
ABM Ltd MLP Ltd
(Amount in Tk.) (Amount in Tk.)
Net Assets (at Fair values) 68,000 25,000

Ordinary Share Capital 10,000 10,000

Retained Earnings 58,000 15,000
68,000 25,000

On January 2018, ABM Ltd had purchased 80% of the ordinary share capital of MLP Ltd
for Tk. 24,000. The fair value of the net assets and retained earnings of MLP Ltd was Tk.
20,000 and Tk. 10,000 respectively at acquisition date. The goodwill arising on
consolidation was impaired by 100%.

Requirement:
At what amount will retained earnings be stated in ABM Ltd’s consolidated statement of
financial position as at 31st December 2018.

3. Define deferred consideration and contingent consideration according to IFRS-03 (2)

Business Combination.