GREAT ZIMBABWE UNIVERSITY

FACULTY OF COMMERCE
DEPARTMENT OF ACCOUNTING AND INFORMATION SYSTEMS

NAME : BRIAN MAWARURA

REG NUMBER : M226095

COURSE NARRATION : GROUP FINANCIAL REPORTING

COURSE CODE : HSPAC421

LECTURER’S NAME : MR MATUNGAMIRE

LECTURER’S COMMENT _____________________________________________

_____________________________________________

MARK

Page 1 of 3
QUESTION 1

DUCK LTD GROUP

Duck 80%
NCI 20%

WORKINGS

1. Goodwill Calculation

$ $
Consideration 4 000 000
Shares ($1.80 x 800 000) 1440 000
Deferred Consideration (200 000 x 0.7513) 1503 000
NCI @ Fair Value 1 520 000
8 463 000
Represented by
Share Capital 2 000 000
Retained Earnings @ Acquisition 500 000 (2 500 000)
Goodwill 5 963 000

Impairment
As Calculated 5 963 000
Impairment Loss(0.25 x 5 963 000) (1491 000)
Carrying amount Goodwill 4 472 000

80% x 1 491 000 = $1 193 000

20% x 1 491 000 = $298 000

2. Group Retained Income

$
Duck Limited 5 600 000
Balance (1 200 000 – 500 000 x 80%) 560 000
Less Unrealised Profit (50 000 x .20%) (10 000)
Finance Cost Yr 1(2 000 000 x 0.9091 – 1 503 000) (316 000)
Impairment (1 193 000)
Carrying Amount Retained Income 4 641 000

Page 2 of 3
3. Non Controlling Interest

$
Opening balance 1 520 000
Less Impairment (298 000)
Share of (1 200 000 – 500 000) 20% 140 000
NCI 1 362 000

4. Goods in Transit

25/125 x $50 000 = $10 000

DUCK LTD

Consolidated Statement of Financial Position as at 31 December 2022

Notes Amount $
ASSETS
Non Current Assets
Property, Plant & Equipment (22 000 000 + 6 000 000) 28 000 000
Goodwill 1 4 472 000
Total Non Current Assets 32 472 000
Current Assets
Inventory (2 200 000 + 400 000 – 10 000) 2 2 590 000
Trade & Other Receivables (1 600 000 + 800 000 – 10 000) 4 2 390 000
Cash (800 000 + 200 000) 1 000 000
Total Assets 38 452 000

EQUITY & LIABILITIES

Share Capital (8000 000 + 1 440 000) 9 440 000
Retained Earnings 4 641 000
Attributable to Shareholders 1 4081 000
Non Controlling Interest 3 1 362 000
15 443 000
Lon term Liabilities
Long term loan (12 000 000 + 1 600 000) 13 600 000
Deferred Consideration (1 503 000 + 316 000) 1 819 000
Current Liabilities
Trade Payables (5 000 000 + 2 600 000 – 10 000) 4 7 590 000
Total Equity & Liabilities 38 452 000

Page 3 of 3