Cante purchased 80% of Loupe for $600 000 two years ago when Loupe's retained earnings showed a balance of $100 000. Loupe s000 500 Cante $000 Non-Current Assets 1 000 Investment in Loupe 600 600 1 100 800 Current Assets Total Assets 2 400 500 200 Equity Share Capital ($1) Retained Earnings 800 400 600 1 300 1 100 500 Liabilities Total Equity and Liabilities 2 400 1 100 Additional Information: Cante measures its non-controlling interest using the fair value method. The fair value of Loupe's equity shares acquired was $200 000 at acquisition. Prepare the consolidated statement of financial position for the Cante Group for year ended 2020 December 31. A. Cante has an intracompany trade receivable of $1 500 at year-end due from Loupe. This does not agree with the corresponding $1 000 trade payable in Loupe due to a cheque for $500 being sent by Loupe immediately prior to year-end which Cante did not receive until after the new accounting year started. How do you account for this cash in transit and intracompany balances? B. Describe the procedure you would follow when preparing a consolidated statement of cash flows using the indirect method when the objective is to reconcile net income from the accruals to a cash basis. C. Sterling Group disposed of its 100% owned subsidiary in Dollar Limited during the year ended 2020 August 31. Sterling group received $52M cash proceeds from the acquirer. Dollar Limited had a cash balance of $1.4M at the date of disposal. D.
Cante purchased 80% of Loupe for $600 000 two years ago when Loupe's retained earnings showed a balance of $100 000. Loupe s000 500 Cante $000 Non-Current Assets 1 000 Investment in Loupe 600 600 1 100 800 Current Assets Total Assets 2 400 500 200 Equity Share Capital ($1) Retained Earnings 800 400 600 1 300 1 100 500 Liabilities Total Equity and Liabilities 2 400 1 100 Additional Information: Cante measures its non-controlling interest using the fair value method. The fair value of Loupe's equity shares acquired was $200 000 at acquisition. Prepare the consolidated statement of financial position for the Cante Group for year ended 2020 December 31. A. Cante has an intracompany trade receivable of $1 500 at year-end due from Loupe. This does not agree with the corresponding $1 000 trade payable in Loupe due to a cheque for $500 being sent by Loupe immediately prior to year-end which Cante did not receive until after the new accounting year started. How do you account for this cash in transit and intracompany balances? B. Describe the procedure you would follow when preparing a consolidated statement of cash flows using the indirect method when the objective is to reconcile net income from the accruals to a cash basis. C. Sterling Group disposed of its 100% owned subsidiary in Dollar Limited during the year ended 2020 August 31. Sterling group received $52M cash proceeds from the acquirer. Dollar Limited had a cash balance of $1.4M at the date of disposal. D.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Cante purchased 80% of Loupe for $600 000 two years ago when Loupe's retained earnings
showed a balance of $100 000.
Loupe
S000
500
Cante
$000
Non-Current Assets
1 000
Investment in Loupe
600
Current Assets
800
600
Total Assets
2 400
1 100
500
200
Equity Share Capital ($1)
Retained Earnings
800
400
1 300
1 100
600
500
1 100
Liabilities
Total Equity and Liabilities
2400
Additional Information:
Cante measures its non-controlling interest using the fair value method. The fair value of
Loupe's equity shares acquired was $200 000 at acquisition.
Prepare the consolidated statement of financial position for the Cante Group for year ended
2020 December 31.
А.
Cante has an intracompany trade receivable of $1 500 at year-end due from Loupe. This
does not agree with the corresponding $1 000 trade payable in Loupe due to a cheque for
$500 being sent by Loupe immediately prior to year-end which Cante did not receive until
after the new accounting year started. How do you account for this cash in transit and
intracompany balances?
В.
Describe the procedure you would follow when preparing a consolidated statement of cash
flows using the indirect method when the objective is to reconcile net income from the
accruals to a cash basis.
C.
Sterling Group disposed of its 100% owned subsidiary in Dollar Limited during the year
ended 2020 August 31. Sterling group received $52M cash proceeds from the acquirer.
Dollar Limited had a cash balance of $1.4M at the date of disposal.
D.
21/05
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