Company Accounting: Impact of Acquiring Blanca Ltd, Journal Entries, Consolidated Statement of Profit or Loss, and Dividend

This report discusses the impact of acquiring Blanca Ltd on Antara Ltd's financial statements, including journal entries and consolidated statement of profit or loss. It also covers the accounting treatment of dividends using the equity method.

Company
Accounting
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Contents
INTRODUCTION...........................................................................................................................4
PART A (Problem Solving).............................................................................................................4
a) Prepare the journal entries for Antara Ltd at 30 June 2020 in accounts for its investment in
Blanca Ltd, assumin on Antara Ltd’s .........................................................................................4
disclosure of financial information. (g Antara Ltd prepares consolidated financial statements..4
b.) Prepare the consolidated statement of profit or loss and other comprehensive income for
Antara Ltd for the year ended at 30 June 2020, assuming this statement includes Blanca Ltd’s
financial results............................................................................................................................5
PART B (Recommendation)............................................................................................................5
The differences between applying the equity method of accounting in Antara Ltd’s own
accounting records.......................................................................................................................6
The content of Antara Ltd’s relevant financial statement............................................................6
The extent of financial information available to Antara Ltd’s external users.............................7
References to the financial information in Part A and relevant accounting standards. ..............7
How dividends paid by Blanca Ltd are accounted for using the equity method of accounting. .8
How dividends are disclosed in Antara Ltd’s relevant financial statement.................................8
References to the financial information in Part A and relevant accounting standards................8
CONCLUSION................................................................................................................................9
REFRENCES.................................................................................................................................10
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INTRODUCTION
Company accounting relates with recording transition with directly related with decision
taken of acquisition or other by Business organisations. This report has been formulated to define
the impact of acquiring Blanca Ltd’s the importance by making a formulating income statement
as well as recording journal entries and impact and Recommendation related to providing
dividend in effective manner.
PART A (Problem Solving)
a) Prepare the journal entries for Antara Ltd at 30 June 2020 in accounts for its investment in
Blanca Ltd, assumin on Antara Ltd’s
disclosure of financial information. (g Antara Ltd prepares consolidated financial statements.
Journal entries
Journal of Antara Ltd as on year
ended
Date Particular L.f Dr Cr
Equity share 198000
To cash a/c 198000
Being equity share issued
Inventory a/c 153000
Land a/c 198000
Equipment a/c on Antara Ltd’s
disclosure of financial information.
( 432000
To Blanca Ltd 783000
Cash 85000
To machine a/c 85000
Depreciation 10000
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To cash a/c 10000
Cash 126000
TO inventory 126000
b.) Prepare the consolidated statement of profit or loss and other comprehensive income for
Antara Ltd for the year ended at 30 June 2020, assuming this statement includes Blanca
Ltd’s financial results.
Acquisition analysis : The meaning of acquisition analysis is to acquire the business of
others. This can help to grow their business and continue the all activities. It is important for ant
organisation to focus on risk and potential benefits in case of acquisition that states where this
deal will success or not. In buying the business there is need to deeply study of assets and
liabilities of seller company that helps to know is it have on any debts or liabilities which make
liable to buyer to pay off. In case of Antara Ltd who acquired the business of Blansa Ltd is
required to analyse the all risk and opportunities before making consolidated financial states that
can help to increase the organisational productivity.
Consolidated profit & loss statement
Profit & Loss Statement
Particular Amount
Revenue 855000 450000
Expenses 319000 250000
Profit before tax 986000 29000
Income tax 130000 80000
Profit after tax 250000 205000
Gain on non current assets 60000 30000
Comprehensive income 31000 225000
From the above Consolidated profit & loss statement it has interpreted that chosen
organisation is getting comprehensive income as 31000 and 225000 in the accounting year by
considering all income and expenses. This helps to make higher profits by keeping records and
monitoring all activities.
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PART B (Recommendation)
a.)Impact of changes in consolidated financial statement on Antara Ltd’s disclosure of
financial information.
The differences between applying the equity method of accounting in Antara Ltd’s own
accounting records
Financial statement prepared business organisation define value of profit for a particular
period of time management department of of Antara Ltd acquire plans unlimited this impact on
its financial statement position it entirely affect its accounting standard procedure (Ibarrondo-
Dávila, López-Alonso and Rubio-Gámez, , 2015).
Financial statement describe each and every element is directly or indirectly impact on
the profitability rate of business organisation it is the essential part of every business as whether
they are small or large or multinational corporation each management department used to
prepare income statement to show real value of their profit and expenses incurred for a particular
given period of time does it is very essential for each department to prepare a formulate income
statement by using effective business or rules related with accounting is pending without using
effective tool of accounting it is not possible to adjust all the relevant transaction or impact on
business activities that manager show within their financial statement is in every business or
trading activities that your indirectly impact on trade business policies does it is really essential
for organisations to work in ethical manner and formulate comprehensive income statement
according to the rules of financial standards they include all kind of adjustment related with
depreciation Tax session acute or another income and profit received from various business on
Antara Ltd’s disclosure of financial information, activities. Generally the manager of of Antara
Ltd use accrual accounting report system which help in achieving goals of business organisation
within a given period of time by fulfilling all the essential ethical business activities.
The content of Antara Ltd’s relevant financial statement
Financial statement prepared business organization define value of profit for a particular
period of time management department of of Antara Ltd acquire plans Blanca Ltd’s this impact
on its financial statement position it entirely affect its accounting standard procedure. They
acquire Blanca Ltd’s company which help in increasing their profit but they also acquire their
liabilities and issue shares is directly impact on its financial statement they change profit
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situation as well as position of other items as they are also affected with increment and
decrement of profits depreciation charged with high rate as other items of an introverted not
effect on this but due to acquiring of land they change their depreciation policy distributing or
issue equity help in increasing capital value of their organization does it is essential for business
that the use effective business policies and strategies (Mahmoudi, Jodeiri, and Fatehifar, 2017).
The extent of financial information available to Antara Ltd’s external users.
Their profit value has been increase from the past year is a cell inventory however their
Express it is related with depreciation has been increased with high rate even through they focus
on ceiling land but it has effect on their depreciation account as value of this account has been
increases with high rate however these standard has been formulated in effective manner.
Management department of Antara Limited use International Financial standard rules as well as
a principal which help in providing them the matter guideline through which they are not able to
break any rule regarding with this organisation acquisition procedure acquisition help in
increment of organisations capital. However, wrong decision related with acquisition may
become the reason of increment of that liabilities for the business organisation who require
another this is the decision related with acquiring Blanca Limited is correct for another Limited
as with acquiring it. Assets and liabilities this management organisation help in achieving their
goals and it has their profitability date prepare a consolidated balance sheet which help in
providing a true and fair view for their investors so they can understand and evaluate profit
generated by this organisation at UK acquisition of shares.
References to the financial information in Part A and relevant accounting standards.
Financial decision making useful in taken decision which help this organisation to choose
best alternative as a less work in ethical manner by using profit and loss statement external uses
help in analysing the financial position of organisation as well as their property date and effect of
acquisition of of the Blanca Ltd’s effect of each item on this equation is strategy. Whether it is
beneficial to investors or not all this relevant answer help in business organisation by preparing a
formulating income statement able to give answer all the questions of their investors they
considered as the most essential part of business organisation as they share their capital for
running business in effective manner that it is very essential for manager of Blanca Ltd’s to
present profit and loss statement. After adjustment of each and every religion transaction which
directly affect on influence with this acquisition of deal basically internal and external users.
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Recommendation related with dividend
How dividends paid by Blanca Ltd are accounted for using the equity method of accounting
Acquisition of Blanca Ltd’s Limited help in expanding business of Antara Limited
however they need to provide dividend to the external as well as internal shareholders of plant
cell Limited for this purpose the use equity method of accounting in which they are on the basis
of share held by preference order equity shareholders provide them dividend according to their
part of share capital this method help in reducing conflict arises between shareholders regarding
their capital. Other issues dividend is play essential role for success of business organisation as a
higher rate of dividend define or become a symbol of strong position of business organisation
within the market dividend is disclosed as laboratory for the business organisation and the
unlimited show it in the air equity is folder as paying dividend for shareholder is essential
liability however it will help in managing their attacks because government provides subsidiaries
and various benefit to those organisation which of a dividend to their shareholders (Killian, and
O'Regan, 2016).
How dividends are disclosed in Antara Ltd’s relevant financial statement
Dividend help in providing effective business decisions as well as implement Goodwill
within business organisation these tools useful in build a strong position which help in running
business activity in effective manner. Dividend help in providing effective decision the business
organisation by providing dividend to their share holder able to maintain interest as well as
attraction towards the organisation management department of an interim use effective business
policies and Strategies for providing the use those method through which they can provide higher
rate of dividend which help in maintaining the year shareholders interest. It will directly impact
on financial statement as these didn't help in providing and showing effective and positive effect
on the business organisation financial statement useful in providing better financial statement
and position through which organisation can able to generate or maintain their business position
all.
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References to the financial information in Part A and relevant accounting standards.
These are essential relevant when whenever an organisation come into any transaction it
directly impact on its capital structure the capital either will get increasing or decreasing it would
depend on the Strategies and Portfolio decision taken by management department the decision of
another limited to acquire of Benetton Limited is totally inside has it will help in providing for
enhancing their business capital which help in attaining their goals (Hanif, Rakhman. and
Nurkholis, 2019).
CONCLUSION
From the above analysis it has been recognised the financial statements should be made
according to the policies in procedure and ethical principle rules which made by accounting
standards and providing dividend help in generating positive Goodwill among business
organisation as well as build strong position within the market
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REFRENCES
From books and journals
Ibarrondo-Dávila, M .P., López-Alonso, M. and Rubio-Gámez, M. C., 2015. Managerial
accounting for safety management. The case of a Spanish construction company. Safety
science, 79, pp.116-125.
Chompu-Inwai, R., Jaimjit, B. and Premsuriyanunt, P., 2015. A combination of Material Flow
Cost Accounting and design of experiments techniques in an SME: the case of a wood
products manufacturing company in northern Thailand. Journal of Cleaner
Production, 108, pp.1352-1364.
Mahmoudi, E., Jodeiri, N. and Fatehifar, E., 2017. Implementation of material flow cost
accounting for efficiency improvement in wastewater treatment unit of Tabriz oil refining
company. Journal of Cleaner Production, 165, pp.530-536.
Killian, S. and O'Regan, P., 2016. Social accounting and the co-creation of corporate
legitimacy. Accounting, Organizations and Society, 50, pp.1-12.
Hanif, H., Rakhman, A. and Nurkholis, M., 2019. The Construction of Entrepreneurial
Accounting: Evidence from Indonesia. Reference to this paper should be made as
follows: Hanif, H, pp.104-117.
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