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Question 3 Serena Ple acquired 85% of the share capital of Venus Ltd on 1 January 2016 when Venus Lid's retained earnings were 4,900,000. Their individual Statements of Financial Position for Serena Ple and Venus Ltd at 31" December 2016 are: Serena Plc Venus Ltd Assets "000 1000 9000 9000 Non-current assets Property, plant and equipment 20,655 4,875 Investment at cost 5,125 25,780 Current assets Inventories 3,525 1,480 Trade receivables 5,885 1,860 Cash and cash equivalents 12,295 860 4,200 Total assets 38,075 4,875 2.885 9,075 7,500 25,115 32,615 1.500 5,130 6,630 Equity and liabilities Equity Ordinary share capital Retained earnings Non-current liabilities Long term loan Current liabilities Trade payables Accruals Total equity and liabilities 750 4,305 405 2,045 400 4,710 38,075 2,445 9,075 Additional Information: 1. During 2016 Venus Ltd sold goods to Serena Ple for 2,250,000. Venus Ltd sells all goods to achieve a gross profit margin of 40%. Serena Ple's inventory at year end included 750,000 of goods purchased from Venus Ltd. 2. Venus Ltd's trade receivables include a balance of 187,500 owed from Serena Plc. Serena Plc's trade payables include a balance of 150,000 owed to Venus Ltd. 3. Serena Plc made a BACS payment of 37,500 to Venus Ltd on 31" December 2016. The BACS payment was received in Venus Ltd's bank account on 30 January 2017 Following a due diligence of Venus Ltd by Serena Plc the fair value of plant with a useful economic life of 3 years at 31" December 2015 was 900,000. The net book value of this plant at acquisition was 720,000. 183 Requirement: (a) Prepare the consolidated statement of financial position for Serena Group as at 31" December 2016, showing the following 4. accounts: Cost of Control Non-controlling Interests Consolidated Reserves 45 Marks Question 3 Serena Ple acquired 85% of the share capital of Venus Ltd on 1 January 2016 when Venus Lid's retained earnings were 4,900,000. Their individual Statements of Financial Position for Serena Ple and Venus Ltd at 31" December 2016 are: Serena Plc Venus Ltd Assets "000 1000 9000 9000 Non-current assets Property, plant and equipment 20,655 4,875 Investment at cost 5,125 25,780 Current assets Inventories 3,525 1,480 Trade receivables 5,885 1,860 Cash and cash equivalents 12,295 860 4,200 Total assets 38,075 4,875 2.885 9,075 7,500 25,115 32,615 1.500 5,130 6,630 Equity and liabilities Equity Ordinary share capital Retained earnings Non-current liabilities Long term loan Current liabilities Trade payables Accruals Total equity and liabilities 750 4,305 405 2,045 400 4,710 38,075 2,445 9,075 Additional Information: 1. During 2016 Venus Ltd sold goods to Serena Ple for 2,250,000. Venus Ltd sells all goods to achieve a gross profit margin of 40%. Serena Ple's inventory at year end included 750,000 of goods purchased from Venus Ltd. 2. Venus Ltd's trade receivables include a balance of 187,500 owed from Serena Plc. Serena Plc's trade payables include a balance of 150,000 owed to Venus Ltd. 3. Serena Plc made a BACS payment of 37,500 to Venus Ltd on 31" December 2016. The BACS payment was received in Venus Ltd's bank account on 30 January 2017 Following a due diligence of Venus Ltd by Serena Plc the fair value of plant with a useful economic life of 3 years at 31" December 2015 was 900,000. The net book value of this plant at acquisition was 720,000. 183 Requirement: (a) Prepare the consolidated statement of financial position for Serena Group as at 31" December 2016, showing the following 4. accounts: Cost of Control Non-controlling Interests Consolidated Reserves 45 Marks
