The following are the balance sheets of Ukraine Limited, Poland Limited and Russia Limited, asat the 31 December 2019. The three companies are major players in the automotive industry. MaxLimited acquired 75% of the shares in Poland Limited on January 1 2017 when the reservebalances were as follows: General reserves: $24,000 and retained earnings $60 000.The acquisition of Poland Limited consisted of a deferred cash payment of $300,000 and a shareexchange of 2 shares in Ukraine Limited for every 5 shares acquired in Poland Limited. The marketprice for a Ukraine Limited share at that date was $4.50. The transaction has not been recorded onthe books.On 1 July 2019 Ukraine Limited acquired 30,000 shares in Russia Limited for cash at a price of$2.70 per share. For the year ended 31 December 2019 Russia Limited reported a profit of$64,000 (assume profit accrued evenly during the year). This transaction was recorded on thebooks.Balance Sheet as at 31 December 2019Ukraine LtdPoland LtdRussia Ltd$$Non-Current AssetsLand1,200,000300,000170,000Equipment660, 000100,00070,000Less Depreciation24, 000636, 00010,00090,0006.00064,000Motor Vehicles250, 000200 000120,000Less Depreciation50 ,000200, 00040 000160 00030,00090,0002,036 000550 000324,000InvestmentsRussia Ltd81,000Current AssetsInventory145, 00025, 00045,000Accounts receivable120, 00040, 0008,000Prepayments12, 0007, 0002,000448, 0002.484,00040, 000112 000662 000Bank & cash90.00013,00068,000392,000EQUITY & LIABILITES$1 Ordinary shares900, 000200,000100,000Reserves General reserves170, 00030, 00034,000Retained earnings120, 00024, 00036,000Non-Current Liabilities4% Debentures976, 000362, 000200,000Current LiabilitiesTrade Payables145, 0008, 00015,000Taxation173, 00038 ,0007,000318, 0002.484.00046, 00022,000662 ,000392,000QUESTION 3.ContinuedADDITIONAL INFORMATION:1.At the date of the acquisition the directors of Ukraine Limited determined that the fairmarket value of land owned by Poland Ltd was $450 000, however no adjustments weremade.2.At December 31 2018, goodwill was impaired by $90,000.3.During the year Ukraine Limited sold goods to Poland Ltd for $140 000, after charging amark-up of 40%. At 31 December 2014 only 70% of the goods were sold.4.During the year Poland Limited transferred a motor vehicle to Ukraine Ltd at a price of$30,000, the motor vehicle was new and cost Poland Limited $20,000. Ukraine Limiteddepreciated the motor vehicle at 10% of the cost to them.5.Non-Controlling Interest should be valued at $3 per share at acquisition date.The investment in Poland limited was impaired by 15% of cost price.6.Required:Prepare the Consolidated Balance Sheet for the Ukraine Limited Group as at 31December2019.

A Consolidated Balance Sheet is a financial document which shows the entire financial situation of a…

General reserves Retained earnings Non-Current Liabilities 170,000 30,000 34,000 120,000 24,000 36,000 4% Debentures 976,000 362,000 200,000 Current Liabilities Trade Payables 145,000 8,000 15,000 Taxation 173,000 38,000 7,000 318,000 2,484,000 46,000 662,000 22,000 392.000 QUESTION 3 ......Continued ADDITIONAL INFORMATION: 1. 2. 3. At the date of the acquisition the directors of Ukraine Limited determined that the fair market value of land owned by Poland Ltd was $450 000, however no adjustments were made. At December 31 2018, goodwill was impaired by $90,000. During the year Ukraine Limited sold goods to Poland Ltd for $140 000, after charging a mark-up of 40%. At 31 December 2014 only 70% of the goods were sold. 4. 5. 6. During the year Poland Limited transferred a motor vehicle to Ukraine Ltd at a price of $30,000, the motor vehicle was new and cost Poland Limited $20,000. Ukraine Limited depreciated the motor vehicle at 10% of the cost to them. Non-Controlling Interest should be valued at $3 per share at acquisition date. The investment in Poland limited was impaired by 15% of cost price. Required: Prepare the Consolidated Balance Sheet for the Ukraine Limited Group as at 31December 2019.

General reserves Retained earnings Non-Current Liabilities 170,000 30,000 34,000 120,000 24,000 36,000 4% Debentures 976,000 362,000 200,000 Current Liabilities Trade Payables 145,000 8,000 15,000 Taxation 173,000 38,000 7,000 318,000 2,484,000 46,000 662,000 22,000 392.000 QUESTION 3 ......Continued ADDITIONAL INFORMATION: 1. 2. 3. At the date of the acquisition the directors of Ukraine Limited determined that the fair market value of land owned by Poland Ltd was $450 000, however no adjustments were made. At December 31 2018, goodwill was impaired by $90,000. During the year Ukraine Limited sold goods to Poland Ltd for $140 000, after charging a mark-up of 40%. At 31 December 2014 only 70% of the goods were sold. 4. 5. 6. During the year Poland Limited transferred a motor vehicle to Ukraine Ltd at a price of $30,000, the motor vehicle was new and cost Poland Limited $20,000. Ukraine Limited depreciated the motor vehicle at 10% of the cost to them. Non-Controlling Interest should be valued at $3 per share at acquisition date. The investment in Poland limited was impaired by 15% of cost price. Required: Prepare the Consolidated Balance Sheet for the Ukraine Limited Group as at 31December 2019.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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