Online Exam

ONLINE EXAM

Contents
MAIN BODY............................................................................................................................4
SECTION A...........................................................................................................................4
Question 1..............................................................................................................................4
Question 2..............................................................................................................................4
SECTION B...........................................................................................................................4
Question 4..............................................................................................................................4
Question 5..............................................................................................................................4

SECTION A
Question 1
A).
Solution to
Question 1
Step 1
Group structure
Parent 70%
NCI 30%
Step 2
Calculate the consideration transferred £000
Cash 220,000
Contingent consideration 20,000
Deferred consideration (200m x 0.83) 166,000
Consideration transferred 406,000
Dr Investment 186,000
Cr Deferred consideration 166,000
Cr Contingent consideration 20,000
Step 3
Calculate Fair value of net assets at the date of acquisition and at the reporting date.
FV of Net
Assets FV of Net Assets
01-04-19 31-03-20
£000 £000
Share capital 100,000 100,000
Retained earnings 24,000 55,000
Fair value adjustment for land (4000 -
5000) (1,000) (1,000)
Fair value adjustment-buildings (10,000 -12,000) (2,000) (2,000)