Question
Exhibited immediately below are the Statements of Financial Position of A plc, B Ltd and C Ltd as at 31 st March 2021 A Plc
Exhibited immediately below are the Statements of Financial Position of A plc, B Ltd and C
Ltd as at 31st March 2021
|
| A Plc | B Ltd | C Ltd |
|
| m | m | m |
| ASSETS |
|
|
|
| Non-current assets |
|
|
|
| Property Plant and Equipment | 2173 | 1366 | 1167 |
| Investment in B Ltd | 1300 |
|
|
| Investment in C Ltd | 136 | 570 | - |
|
| 3609 | 1936 | 1167 |
|
|
|
|
|
| Current assets |
|
|
|
| Inventories | 527 | 432 | 395 |
| Trade receivables | 433 | 404 | 387 |
| Intercompany trading account with A Plc |
| 48 |
|
| Intercompany trading account with B Ltd |
|
| 29 |
| Intercompany trading account with C Ltd | 62 |
|
|
| Cash and Bank | 14 | 6 | 4 |
|
| 1036 | 890 | 815 |
|
|
|
|
|
| TOTAL ASSETS | 4645 | 2826 | 1982 |
|
|
|
|
|
| EQUITY AND LIABILITIES |
|
|
|
| Equity |
|
|
|
| Ordinary Share Capital (all shares) | 652 | 410 | 220 |
| Capital Reserve | 447 | 265 | 160 |
| Retained earnings | 1745 | 1375 | 840 |
| Total Equity | 2844 | 2050 | 1220 |
|
|
|
|
|
| Non-current liabilities |
|
|
|
| Long-term borrowings | 1278 | 360 | 447 |
|
|
|
|
|
| Current liabilities |
|
|
|
| Trade and other payables | 488 | 398 | 276 |
| Intercompany trading account with A Plc |
|
| 39 |
| Intercompany trading account with B Ltd | 35 |
|
|
| Intercompany trading account with C Ltd | - | 18 | - |
|
| 523 | 416 | 315 |
|
|
|
|
|
| TOTAL EQUITY AND LIABILITIES | 4645 | 2826 | 1982 |
Other Information
- A Plc purchased 328m shares in B Ltd on 1 April 2014, on which date the retained earnings of B Ltd stood at 530m and the capital reserve of B Ltd stood at 135m
- On 1 April 2014 the fair value of the plant of B Ltd exceeded its book value by 400m. This plant had an estimated remaining useful life of 10 years at that date. This adjustment has not been reflected in the individual accounts of B Ltd, it should however be incorporated on consolidation
- B Ltd owns 165m shares in C Ltd, and A Plc owns 22m shares in C Ltd. Both of these investments were acquired on 25th August 2015 when the retained earnings of C Ltd stood at 330m and the capital reserve of C Ltd stood at 90m
- It is the group accounting policy to value goodwill and non-controlling interest in full. The fair values of the effective non-controlling interests in B Ltd and C Ltd on the dates of acquisition were 300m and 220m respectively
- The goodwill arising in respect of the acquisitions of B Ltd and C Ltd had been impaired by 80m and 50m respectively up to 31 March 2021
- There had been no changes in the total issued share capital of A Plc, B Ltd or C Ltd for over 15 years
- During the year A Plc sold goods costing 70m to B Ltd for 110m. A quarter of these goods were unsold by B Ltd as at 31 March 2021
- Any differences in the intercompany trading accounts should be assumed to represent cash in transit as at the year end
Required
Prepare the Consolidated Statement of Financial Position of A Plc as at 31 March 2021
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Financial Accounting A Concepts Based Introduction
Authors: David Kolitz
1st Edition
1138844977, 978-1138844971
