Company Accounting

This document provides answers to questions on acquisition analysis, consolidation worksheet entries, and consolidation worksheet in Company Accounting. It also includes a bibliography of relevant resources.

Running head: COMPANY ACCOUNTING
Company Accounting
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Author’s Note:

1COMPANY ACCOUNTING
Table of Contents
Answer to question 1:......................................................................................................................2
Answer to question 2:......................................................................................................................3
Answer to question 3:......................................................................................................................4
Bibliography:...................................................................................................................................6

2COMPANY ACCOUNTING
Answer to question 1:
Acquisition Analysis at 1July 2017:
Share Capital 13,000
General Reserve 5,000
Retained Earnings 4,050
Book Value of total assets 22,050
Add: Fair Value Adjustments:
Plant 1,000
Land 2,000
Inventories 800 3,800
Add: Unrecorded assets and liabilities:
Brand Value 1,200
Unrecorded Liabilities (1,500) (300)
Fair Value of Net Identifiable Assets 25,550
Less: Purchase Consideration
Transferred 24,600
Gain on Acquisition 950
Goodwill appearing in the books 500
Net Gain 450

3COMPANY ACCOUNTING
Answer to question 2:
Consolidation Worksheet Entries at 30 June 2019:
Explanations Debit Credit
Share Capital 13,000
General Reserve 01/07/2017 5,000
Retained Earnings 01/07/2017 4,050
Business Combination Valuation Reserve 22,050
Plant 1,000
Land 2,000
Inventories 800
Brand Value 1,200
Unrecorded Liabilities 1,500
Business Combination Valuation Reserve 3,500
Accumulated Depreciation 3,000
Plant 3,000
Business Combination Valuation Reserve 25,550
Purchase Consideration Transferred 24,600
Goodwill 500
Gain 450
General Reserve 3,500
Retained Earnings 01/07/2017 3,500
Gain (1600-1500) 100
Unrecorded Liabilities 100

4COMPANY ACCOUNTING
Answer to question 3:
Consolidation Worksheet:
‘X’
Limited
‘Y’
limited Debit Credit Consolidated
Balance
Revenues 13,000 6,400 19,400
Expenses (7,000) (4,200) (11,200)
Trading profit 6,000 2,200 8,200
Gains (losses) on sale of non-current
assets 3,000 800 3,800
Profit before tax 9,000 3,000 12,000
Income tax expense (2,000) (500) (2,500)
Profit for the period 7,000 2,500 9,500
Retained Earnings (1/7/18) 33,300 5,500 6,050 32,750
Transfer from General reserve 3,000 1,500 1,500 3,000
43,300 9,500 45,250
Dividend paid (2,000) - (2,000)
Retained earnings (30/6/19) 41,300 9,500 43,250
Share capital 15,000 13,000 13,000 15,000
General reserve 1,000 2,000 5,000 3,500 1,500
Other component of Equity 2,500 1,800 4,300
Gain 450 450
Total Equity 59,800 26,300 64,500
Accounts payable 4,000 1,000 5,000
Deferred tax liability 1,800 1,000 2,800
Other non-current liabilities 24,800 23,000 47,800
Unrecorded Liabilities 1,600 1,600
Total liabilities 30,600 25,000 55,600
Total Equity and liabilities 90,400 51,300 120,100
Plant 43,000 38,800 1,000 3,000 79,800
Accumulated Depreciation- Plant (18,200
) (22,000) 3,000 (37,200)
Land 15,000 20,000 2,000 37,000
Brands 8,000 - 1,200 9,200
Shares in ‘Y’ limited 24,600 - 24,600

5COMPANY ACCOUNTING
Financial Assets 11,000 10,500 21,500
Cash 1,000 500
Inventories 4,000 3,000 800 7,800
Goodwill 2,000 1,800 1,800 2,000
Accumulated Impairment Losses - (1,300) 1,300 -
Total Assets 90,400 51,300 120,100

6COMPANY ACCOUNTING
Bibliography:
AASB, C.A.S., 2016. Consolidated Financial Statements.
Hadi, K.T., 2015. Consolidated financial statements.
Hoyle, J.B., Schaefer, T. and Doupnik, T., 2015. Advanced accounting. McGraw Hill.
Picker, R., Clark, K., Dunn, J., Kolitz, D., Livne, G., Loftus, J. and Van der Tas, L.,
2019. Applying IFRS standards. John Wiley & Sons.