PR Corp has not yet accounted for the issue of its own shares or for the acquisition of the investment in SS Corp. Required: (a) Calculate the amount of net assets of SS Corp at acquisition. (b) Calculate the amounts of the following group accounts that should appear in the consolidated financial statements as at 30 June 2019. Share capital Gross profit Retained earnings (not owned by non-controllin
On 1 May 2019, PR Corp purchased 75 per cent of the equity of SS Corp for $2.6 million. The consideration was 35,000 equity shares in PR Corp with a fair value of $2.6 million.
The followings are extracts from the draft (not finalised) statements of profit or loss for PR Corp and its subsidiary SS Corp for the year ending 30 June 2019 together with the draft
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Statements of profit or loss for the year ending 30 June 2019 |
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PR Corp ($000) |
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SS Corp ($000) |
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Gross profit |
1,456 |
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960 |
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Profit for the year |
920 |
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384 |
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Statements of financial position as at 30 June 2019 |
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PR Corp ($000) |
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SS Corp ($000) |
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Share capital |
2,800 |
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740 |
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11,600 |
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1,324 |
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Revaluation surplus |
120 |
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- |
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14,520 |
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2,064 |
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PR Corp has not yet accounted for the issue of its own shares or for the acquisition of the investment in SS Corp.
Required:
(a) Calculate the amount of net assets of SS Corp at acquisition.
(b) Calculate the amounts of the following group accounts that should appear in the consolidated financial statements as at 30 June 2019.
- Share capital
- Gross profit
- Retained earnings (not owned by non-controlling interests)
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