The Statement of Financial Position for Octagon Limited and Superior Sales Limited as at 31 December 2019 are shown below: Octagon Limited Superior Sales Limited Non-Current Assets: Property, Plant & Equipment Investments: in Superior Sales Ltd 3,000 1,500 1,500 4,500 1,500 Current Assets: Inventery 650 200 Accounts Receivables 750 420 Cash and Bank 350 100 1,750 6,250 720 Total Assets 2.220 Current Liabilities: Accounts Payables 250 175 Accruals 150 40 400 215 Non- Current Liabilities: Debentures 1,200 800 Deferred Taxation 300 130 1,500 930 Share Capital and Reserves: Ordinary Share Capital @$1 each Retained Profit 3,150 975 1,200 100 4,350 1,075 6,250 2.220 Additional Information: A. Octagon Limited acquired 2,000,000 of the equity shares in Superior Sales Limited on January 1, 2018. The total equity shared of Superier Sales Limited was 2,500,000 and Superier Sales Limited retained profits balance was $450,000 at that date, B. Property, Plant and Equipment (PPE) for Octagon Limited increased by $2.5m due to a revaluation carried out by the company and this was not accounted for at the end of the year. There was no impairment of assets during the ycar. Required: i. Prepare Octagon Limited group consolidated Statement of Financial Position as at 31 December 2019? Explain the terms "Pre-acquisition and Post Acquisition profits? ii.
The Statement of Financial Position for Octagon Limited and Superior Sales Limited as at 31 December 2019 are shown below: Octagon Limited Superior Sales Limited Non-Current Assets: Property, Plant & Equipment Investments: in Superior Sales Ltd 3,000 1,500 1,500 4,500 1,500 Current Assets: Inventery 650 200 Accounts Receivables 750 420 Cash and Bank 350 100 1,750 6,250 720 Total Assets 2.220 Current Liabilities: Accounts Payables 250 175 Accruals 150 40 400 215 Non- Current Liabilities: Debentures 1,200 800 Deferred Taxation 300 130 1,500 930 Share Capital and Reserves: Ordinary Share Capital @$1 each Retained Profit 3,150 975 1,200 100 4,350 1,075 6,250 2.220 Additional Information: A. Octagon Limited acquired 2,000,000 of the equity shares in Superior Sales Limited on January 1, 2018. The total equity shared of Superier Sales Limited was 2,500,000 and Superier Sales Limited retained profits balance was $450,000 at that date, B. Property, Plant and Equipment (PPE) for Octagon Limited increased by $2.5m due to a revaluation carried out by the company and this was not accounted for at the end of the year. There was no impairment of assets during the ycar. Required: i. Prepare Octagon Limited group consolidated Statement of Financial Position as at 31 December 2019? Explain the terms "Pre-acquisition and Post Acquisition profits? ii.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Statement of Financial Position for Octagon Limited and Superior Sales Limited as at 31 December 2019 are shown below:
Octagon Limited
Superior Sales
Limited
Non-Current Assets:
Preperty, Plant & Equipment
Investments: in Superior Sales Ltd
3,000
1,500
1,500
4,500
1,500
Current Assets:
Inventory
650
200
Accounts Receivables
750
420
Cash and Bank
350
100
1,750
720
Total Assets
Current Liabilities:
Accounts Payables
6,250
2,220
250
175
Accruals
150
40
400
215
Non- Current Liabilities:
Debentures
1,200
800
Deferred Taxation
300
130
1,500
930
Share Capital and Reserves:
Ordinary Share Capital @ $1 each
Retained Profit
3,150
975
1,200
100
4,350
1,075
6,250
2,220
Additional Information:
A. Octagon Limited acquired 2,000,000 of the equity shares in Superier Sales Limited on January 1, 2018. The total equity
shared of Superior Sales Limited was 2,500,000 and Supericor Sales Limited retained profits balance was $450,000 at that
date.
B. Property, Plant and Equipment (PPE) for Octagon Limited increased by $2.5m due to a revaluation carried out by the
company and this was not accounted for at the end of the year. There was no impairment of assets during the year.
Required:
i.
Prepare Octagon Limited group consolidated Statement of Financial Position as at 31
December 2019?
Explain the terms "Pre-acquisition and Post Acquisition profits?
i.
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