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  • Consolidated Question Exercise - William and Class

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    T acquired shares in companies J and E in 2019. T's consolidated statement of financial position with J and E as of December 31, 2019 shows: 1) Total assets of T, J, and E combined are K4,581,000, with non-current assets including property, equipment, and investments totaling K2,968,000. 2) Total equity of K3,042,000 includes share capital, retained earnings, and non-controlling interests in J. 3) Current liabilities of K539,000 include trade payables, tax, and an impairment of K2,000 on the investment in E.

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    T acquired shares in companies J and E in 2019. T's consolidated statement of financial position with J and E as of December 31, 2019 shows: 1) Total assets of T, J, and E combined are K4,581,000, with non-current assets including property, equipment, and investments totaling K2,968,000. 2) Total equity of K3,042,000 includes share capital, retained earnings, and non-controlling interests in J. 3) Current liabilities of K539,000 include trade payables, tax, and an impairment of K2,000 on the investment in E.

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    Consolidated Question Exercise - William and Class

    Uploaded by

    mwenihabby7
    T acquired shares in companies J and E in 2019. T's consolidated statement of financial position with J and E as of December 31, 2019 shows: 1) Total assets of T, J, and E combined are K4,581,000, with non-current assets including property, equipment, and investments totaling K2,968,000. 2) Total equity of K3,042,000 includes share capital, retained earnings, and non-controlling interests in J. 3) Current liabilities of K539,000 include trade payables, tax, and an impairment of K2,000 on the investment in E.

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    of 2

    FINANCIAL REPORTING

    CONSOLIDATED QUESTION

    The summarized draft statements of financial position of the three companies at 31st DECEMBER 2019
    are:

    ITEMS T J

    K’000 K’000

    ASSETS

    Non-current Assets

    PPEs 1103 980

    Investment: 840,000 shares in J 885

    1988 980

    Current Assets

    Inventory 380 640

    Trade Receivables 190 310

    Bank 35 58

    Total Assets 2593 1988

    Equity and Liabilities

    Equity Shares at K1.00 each 1120 840

    Retained Earnings 1232 602

    2352 1442

    Current Liabilities

    Trade Payables 150 480

    Taxation 91 66

    Total Equity & Liabilities 2593 1988


    Additional notes:

    (I) T Acquired its shares in J on January 1, 2019, when J had Retained Earnings of K160,000.
    NCI’s are to be valued at their Fair Value at the date of acquisition. The Fair Value of the NCI
    holding in J at January 1, 2019 was K250,000.

    (II) T acquired its shares in E on January 1, 2019 when E had Retained Earnings of K140,000.

    (III) An impairment test at the year-end shows that the Goodwill for J remains unimpaired but
    that the Investment in E is impaired by K2,000.

    Required:

    Prepare the Consolidated Financial Statement of Financial Position for T as at 31 st DECEMBER 2019.

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