Financial Reporting : Assignment Sample
Added on -2020-07-22
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Financial reportingassignment
Table of ContentsQuestion 1........................................................................................................................................1Question: 2.......................................................................................................................................3Question 3........................................................................................................................................5
Question 1.Parent Ltd ................80%................. Subsidiary Parent Ltd 80% NCI = 20%Acquisition analysis1 July 2014Net fair value of assets and liabilities of subsidiary company :Equity: $280,000 + Land: 16000 (1-30%) + Plant: 10000 (1-30%): $ 280,000+ 11200 + 7000 : $ 298,200a) Total consideration transferred: $ 224000b) Non- controlling interest rate : $ 63,000Total of A+B= $ 287,000.Capital reserve: $ 287,000 - $298,200 : $-11200Capital reserve of subsidiary company: Fair value of subsidiary: $63000 /0.2 : $315,000Fair value of Net income from acquisition:: $ 298,200 - $ 315,000 = $-16800.Capital reserve for Parent company:Total goodwill of subsidiary company: $ 16800Acquired goodwill: $ 11200Total= $ 11200 - $16800 = $ -5600Working note 1: Equity: (Equity capital+ Retained earning + General reserve): $ 200,000+ $ 74,000 + $ 6000 = $280,000Land: 16000*0.7 = $11,200plant: 10000*0.7 = $ 7,000Consideration transfer amount: $ 274,000*80% = $224,000Consolidation entries as on 1 July 20171
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