Boo acquired 80% of Goose's equity for $300,000 on 1 January 20X8. At the date of acquisition Goose had retained earnings of $190,000. On 31 December 20X8 Boo despatched goods which cost $80,000 to Goose, at an invoiced cost of $100,000. Goose received the goods on 2 January 20X9 and recorded the transaction then. The two companies' draft financial statements as at 31 December 20X8 are shown below.STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 20X8BooGoose$'000$'000Revenue5,0001,000Cost of sales2,900600Gross profit2,100400Other expenses1,700320Profit before tax40080Income tax expense13025Profit for the year27055Other comprehensive income:Gain on revaluation of property20-Total comprehensive income for the year29055STATEMENTS OF FINANCIAL POSITION AT 31 DECEMBER 20X8AssetsNon-current assetsProperty, plant and equipment1,940200Investment in Goose300_2,240200Current assetsInventories500120Trade receivables65040Bank and cash170351,320195Total assets3,560395Equity and liabilitiesEquity2,000100Share capital500240Retained earnings20–Revaluation surplus2,520340Current liabilities91030Trade payables13025Tax1,04055Total equity and liabilities3,560395RequiredPrepare a consolidated statement of financial position. It is the group policy to value the non-controlling interest at acquisition at fair value. The fair value of the non-controlling interest in Goose at the date of acquisition was $60,000. Boo acquired 80% of Goose's equity for$300,000 on 1 January 20X8. At the date ofacquisition Goose had retained earnings of$190,000. On 31 December 20X8 Boodespatched goods which cost $80,000 toGoose, at an invoiced cost of $100,000.Goose received the goods on 2 January 20X9and recorded the transaction then. The twocompanies' draft financial statements as at 31December 20X8 are shown below.STATEMENTS OF PROFIT OR LOSS ANDOTHER COMPREHENSIVE INCOMERevenueCost of salesGross profitOther expensesProfit before taxIncome tax expenseProfit for the yearOther comprehensive income:Gain on revaluation of property 20Total comprehensive income for 290 55the yearFOR THE YEAR ENDED 31 DECEMBER 20X8Boo Goose$'000$'0005,0001,0002,9006002,100 4001,700 320400 80130 25270 55STAT EACAITCSECIN LA NSITIO N STATEMENTS OF FINANCIAL POSITION AT 31DECEMBER 20X8AssetsNon-current assetsProperty, plant and equipment1,940 200Investment in Goose3002,240 200Current assetsInventoriesTrade receivablesBank and cash500 120650 40170 351,320 1953,560 395Total assetsEquity and liabilitiesEquityShare capitalRetained earningsRevaluation surplusCurrent liabilitiesTrade payablesТаx2,000100500 240202,520 340910 30130 251,040 553,560 395Total equity and liabilitiesRequiredPrepare a consolidated statement of financialposition. It is the group policy to value thenon-controlling interest at acquisition at fairvalue. The fair value of the non-controllinginterest in Goose at the date of acquisitionwas $60,000.

On 01.01.20X8, BOO acquired Goose's equity = 80% Purchase consideration = $300000 At date of…

Boo acquired 80% of Goose's equity for $300,000 on 1 January 20X8. At the date of acquisition Goose had retained earnings of $190,000. On 31 December 20X8 Boo despatched goods which cost $80,000 to Goose, at an invoiced cost of $100,000. Goose received the goods on 2 January 20X9 and recorded the transaction then. The two companies' draft financial statements as at 31 December 20X8 are shown below. STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 20X8 Boo Goose $'000 $'000 Revenue 5,000 1,000 Cost of sales 2,900 600 Gross profit 2,100 400 Other expenses 1,700 320 Profit before tax 400 80 Income tax expense 130 25 Profit for the year 270 55 Other comprehensive income: Gain on revaluation of property 20 - Total comprehensive income for the year 290 55 STATEMENTS OF FINANCIAL POSITION AT 31 DECEMBER 20X8 Assets Non-current assets Property, plant and equipment 1,940 200 Investment in Goose 300 _ 2,240200 Current assets Inventories 500120 Trade receivables 650 40 Bank and cash 170 35 1,320 195 Total assets 3,560395 Equity and liabilities Equity 2,000 100 Share capital 500 240 Retained earnings 20 – Revaluation surplus 2,520 340 Current liabilities 910 30 Trade payables 130 25 Tax 1,040 55 Total equity and liabilities 3,560 395 Required Prepare a consolidated statement of financial position. It is the group policy to value the non-controlling interest at acquisition at fair value. The fair value of the non-controlling interest in Goose at the date of acquisition was $60,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Boo acquired 80% of Goose's equity for $300,000 on 1 January 20X8. At the date of acquisition Goose had retained earnings of $190,000. On 31 December 20X8 Boo despatched goods which cost $80,000 to Goose, at an invoiced cost of $100,000. Goose received the goods on 2 January 20X9 and recorded the transaction then. The two companies' draft financial statements as at 31 December 20X8 are shown below. STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 20X8 Boo Goose $'000 $'000 Revenue 5,000 1,000 Cost of sales 2,900 600 Gross profit 2,100 400 Other expenses 1,700 320 Profit before tax 400 80 Income tax expense 130 25 Profit for the year 270 55 Other comprehensive income: Gain on revaluation of property 20 - Total comprehensive income for the year 290 55 STATEMENTS OF FINANCIAL POSITION AT 31 DECEMBER 20X8 Assets Non-current assets Property, plant and equipment 1,940 200 Investment in Goose 300 _ 2,240200 Current assets Inventories 500120 Trade receivables 650 40 Bank and cash 170 35 1,320 195 Total assets 3,560395 Equity and liabilities Equity 2,000 100 Share capital 500 240 Retained earnings 20 – Revaluation surplus 2,520 340 Current liabilities 910 30 Trade payables 130 25 Tax 1,040 55 Total equity and liabilities 3,560 395 Required Prepare a consolidated statement of financial position. It is the group policy to value the non-controlling interest at acquisition at fair value. The fair value of the non-controlling interest in Goose at the date of acquisition was $60,000.

STATEMENTS OF FINANCIAL POSITION AT 31
DECEMBER 20X8
Assets
Non-current assets
Property, plant and equipment1,940 200
Investment in Goose
300
2,240 200
Current assets
Inventories
Trade receivables
Bank and cash
500 120
650 40
170 35
1,320 195
3,560 395
Total assets
Equity and liabilities
Equity
Share capital
Retained earnings
Revaluation surplus
Current liabilities
Trade payables
Таx
2,000100
500 240
20
2,520 340
910 30
130 25
1,040 55
3,560 395
Total equity and liabilities
Required
Prepare a consolidated statement of financial
position. It is the group policy to value the
non-controlling interest at acquisition at fair
value. The fair value of the non-controlling
interest in Goose at the date of acquisition
was $60,000.

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