Example 1

The following information relates to Persil, Surf and Aerial for the year to 31 December 2014

Statements of Profit or Loss

Persil

Surf

Aerial

Revenue

1,000

300

210

Less: Costs

(700)

(100)

(80)

Profit before tax

300

200

130

Less: Tax

(100)

(80)

(40)

Profit for the financial year

200

120

90

Example 1 Contd

Statements of Financial Position

Persil

Surf

Aerial

Non-current Assets - Tangible

1,500

500

300

Investments in :

Surf

300

-

-

Aerial

200

-

-

Current Assets

500

220

200

2500

720

500

Equity and Liabilities

Ordinary Share Capital (GH1 shares)

1500

300

100

Retained Earnings

500

220

150

Current Liabilities :

Trade Payables

500

200

250

2500

720

500

Example 1 Contd

Additional information:

(a) Persil bought a 60% holding in Surf six years ago. At that time, Surfs accumulated profits were GH20,000 and the fair value of its shares stood at GH1.20. Persil also bought a 40% holding in Aerial on 1 July 2014. Assume Aerials profits accrued evenly throughout the year.

(b) At the end of the year, upon reviewing goodwill, Persil finds that Surfs goodwill has been impaired by 66,000 Ghana cedis to date ( including 11,000 Ghana cedis for the current year) and Aerial by 8000 Ghana cedis for the current year . Requirement : Prepare the consolidated statement of financial position and statement of profit and loss for the year ended