a] rest your ondersiandind Aparent company OWNS 96% othe equity shares of its associa, parent mad Paes to the asso vate during the year amoun mete slots price(s cost plus 20% IAL Ue reporting tap saiate’s inventory, aot $450,000. The tems remain in the asso ofthese it to be made to the consolidated \d consolidated statement of Required: Teemtfy the relevant adjustments statement of financial comprehensive income position an {three entities as at 31 Emily $000 $000 | 840ly, Additional information: (1) Tom acquired its shares in James on 1 January 20x9 had retained earnings of $160,000. NCIs are to be v fair value at the date of acquisition, Th in James at 1 January 20X9 was $2 when James hued at their fair value of the NCI hold 0,000. ? (2) Tom acquired its shares in Emily on 1 January 209 when Emily | had retained earings of $140,000. fend shows that the goodwill for ithe investment in Errily is chaSociates and joint ventures | Equity { ‘share capital ($1 shares) | Retained earings (W5) Non-controliing interest (W4) | | | Current liabilities 168/560 30% Jan X9 (1 year) ulychapter 6. (WS) Goodwitt | $000 Fair value of parent's holding 805 : NCI holding at fair value 250 | Fair value of sub’s net assots at acquisition (W2) (1,000) | Goodwill at acquisition” reporting date 55 (W4) Non-controlling interestssociates and joint ventures es aie : : 1 Emily wore $140,000 ‘ained eamings of aes Ne the retamg146,000. Therolore the post acquisition ‘ reporting date ey $908,000 of which 30% belong o Tom ie | reserves of Emly ces bo te value of ivestment in associate ang retained earnings ate, the investment is impaired by $2,000. Thisis a ono Investment and is an expense ard soaicy” | ‘At the reporting d reduction in the value of reduces retained earnings. | Tost your understanding 2 saa as ition of three entities as at 30 P s A $000 $000 $000 | 6,000 1,500 1,000 4,800 - - 7,800 1,600 1,000 §,000 1,000 500 | 2,000 750 400 7,000chapter 6 _™ Peete (2) P acquired 30% of the equity share capital of A on 1 October 20X7, paying $300,000 in cash. AL October 20X7 the balance on A's retained earnings was $360,000. (4) Atthe reporting date, it was determined that the investment in Awas, {Impaired by $6,000. No impairment losses had arisen in respect of the goodwil of S Required: Prepare the consolidated statement of financial position of the P Group {as at 30 September 20X8. Sand A for5 and joint ventures a | Required: | prepare te consokated statement ot comprehensive income ar ended 30 September 20X8. Me for the p Group for tho ye: FA] testvour understanding 4 are the Statements of Financial Position of three entities as, 08 as at 39, Below ‘September 20X8:chapter 6 Test your understanding answers "Test your understanding 1 The PUP adjustment is $5,625. In the CSFP: Dr _ Retained earnings (WS) ~ reduceAssociates and joint ventures FQ] Tostyour anaes | Consolidated statement of financial position as at 30 Berton | 20x8 | | Non-current assets $000 Property, plant & equipment (6,000 + 1,500) ; |, Goodwill (W3) 7.50 | investment in associate (WO) c Current assets (1,700 + 1,000)a = = (W2) Net assets of sub Share capital ($1 shares) Retained eamings ‘Acquisition Reperting sate date $000 $000 1,900 1000 350 750 11350 1,750 Post acquisition profits = 400 chapter 6Associates and joint ventures ee slices (Wa) Investment Cost of investment x x post acquisition profits (20% x (400 - 360))