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Assessment task and assessment criteria for coursework Part A Scenario You are the assistant to the Financial Controller of Sun Group, a retailer in Hong

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Assessment task and assessment criteria for coursework Part A Scenario You are the assistant to the Financial Controller of Sun Group, a retailer in Hong Kong with 50 stores spread around the territory, selling mainly food items and clothing. Sun Ltd has recently acquired some shares in a subsidiary company, Lin Ltd and also an associate company, Wan Ltd. Sun acquired an 80% ordinary shareholding and also acquired 25% of the loan in Lin and gained control of the company on 1st February 2016 when the general reserve of Lin was $10 million and the retained earnings were $15 million. At the date of acquisition, the fair value of the non-controlling interest in Lin was considered to be $25 million. No adjustment has been made in the financial statements for these amounts. Following an impaiment review during the year, Sun has decided to write off 25% of the value of goodwill arising upon the acquisition of Lin. On 1st April 2014 Sun also purchased a 20% holding in Wan, when the general reserve was $3 million and the retained earnings were $12 million. The fair values were the same as the book values. Below are the summarised financial statements for Sun Ltd, Lin Ltd and Wan Ltd. Balance Sheets at 31/12/2019 HK$ 000's Sun Lin Wan Non current assets Property, plant, equipment 552,100 178.200 80,400 Investment in subsidiary 180,000 Investment in associate 125,400 857,500 178,200 80,400 Current assets Inventortes 88,200 51,600 18,600 Trade receivables 54,300 28.700 12.800 Current account Lin 8,720 Loan Interest receivable 1,000 Bank 17.600 10,200 4,370 169,820 90,500 35,770 Total assets 1,027,320 268,700 116,170 500,000 50,000 40.000 5,000 Equity and reserves Share capital General Reserve Retained earnings Shareholders funds Non current liabilities 100.000 165,920 25.000 34,510 25.970 765,920 109,510 70,970 200.000 80,000 30.000 Loan Current abilities Trade payables Current account Sun Loan Interest payable 61,400 66.470 15,200 8.720 4,000 79,190 61,400 15,200 116,170 Total equity and liabilities 1,027,320 268,700 Income statements for ye 31/12/2013 Sales Cost of sales Gross profit Expenses Operating profit Profit before tax Income tax expense Profit after tax Sun 985,400 -788,320 197,080 -157,664 39,416 39,416 -7,883 31,533 HK $ 000's Lin Wan 374,200 276,410 -261,940 -221,128 112,260 55,282 -89,808 -44.226 22,452 11,056 22,452 11,056 -4.490 -2.211 17,962 8,845 Required: a) The Financial Controller has asked you, as her assistant, to prepare the consolidated statement of financial position and the consolidated income statement for Sun Group Ltd for the year ended 31 December 2019, complying, as far as the information permits, with the requirements of IFRS 10 Consolidated Financial Statements, IAS 28 Investments in Associates and Joint Ventures and IFRS 3 Business Combinations. Non-controlling interests are to be measured using Method 2. (20 marks) Assessment task and assessment criteria for coursework Part A Scenario You are the assistant to the Financial Controller of Sun Group, a retailer in Hong Kong with 50 stores spread around the territory, selling mainly food items and clothing. Sun Ltd has recently acquired some shares in a subsidiary company, Lin Ltd and also an associate company, Wan Ltd. Sun acquired an 80% ordinary shareholding and also acquired 25% of the loan in Lin and gained control of the company on 1st February 2016 when the general reserve of Lin was $10 million and the retained earnings were $15 million. At the date of acquisition, the fair value of the non-controlling interest in Lin was considered to be $25 million. No adjustment has been made in the financial statements for these amounts. Following an impaiment review during the year, Sun has decided to write off 25% of the value of goodwill arising upon the acquisition of Lin. On 1st April 2014 Sun also purchased a 20% holding in Wan, when the general reserve was $3 million and the retained earnings were $12 million. The fair values were the same as the book values. Below are the summarised financial statements for Sun Ltd, Lin Ltd and Wan Ltd. Balance Sheets at 31/12/2019 HK$ 000's Sun Lin Wan Non current assets Property, plant, equipment 552,100 178.200 80,400 Investment in subsidiary 180,000 Investment in associate 125,400 857,500 178,200 80,400 Current assets Inventortes 88,200 51,600 18,600 Trade receivables 54,300 28.700 12.800 Current account Lin 8,720 Loan Interest receivable 1,000 Bank 17.600 10,200 4,370 169,820 90,500 35,770 Total assets 1,027,320 268,700 116,170 500,000 50,000 40.000 5,000 Equity and reserves Share capital General Reserve Retained earnings Shareholders funds Non current liabilities 100.000 165,920 25.000 34,510 25.970 765,920 109,510 70,970 200.000 80,000 30.000 Loan Current abilities Trade payables Current account Sun Loan Interest payable 61,400 66.470 15,200 8.720 4,000 79,190 61,400 15,200 116,170 Total equity and liabilities 1,027,320 268,700 Income statements for ye 31/12/2013 Sales Cost of sales Gross profit Expenses Operating profit Profit before tax Income tax expense Profit after tax Sun 985,400 -788,320 197,080 -157,664 39,416 39,416 -7,883 31,533 HK $ 000's Lin Wan 374,200 276,410 -261,940 -221,128 112,260 55,282 -89,808 -44.226 22,452 11,056 22,452 11,056 -4.490 -2.211 17,962 8,845 Required: a) The Financial Controller has asked you, as her assistant, to prepare the consolidated statement of financial position and the consolidated income statement for Sun Group Ltd for the year ended 31 December 2019, complying, as far as the information permits, with the requirements of IFRS 10 Consolidated Financial Statements, IAS 28 Investments in Associates and Joint Ventures and IFRS 3 Business Combinations. Non-controlling interests are to be measured using Method 2. (20 marks)

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