hello everyone.. Can you please help me with Question 1.. It is an assignment and i really need to pass this module..

Assignment for Advanced Financial Reporting A hard copy of the assignment must submitted by latest the 4th of May 2016. Answer both questions and show all your workings. Plagiarism will be penalized. Question 1. [25 marks] On 1 January 2015 Port Louis Ltd. bought 360 million shares in St. Pierre Ltd and Rs. 22.8 million worth of ordinary shares in Albion Ltd. As at 31 December 2015 the accountant at Port Louis Ltd. had recorded only the immediate cash consideration for the share purchases made in Albion Ltd. The purchase considerations were: A. For shares acquired in St. Pierre Ltd: 1) Immediate cash payment of 5 cents per share, 2) Issued and exchange shares of 1 for every 5 shares acquired in St. Pierre Ltd. The market price of Port Louis Ltd. and St. Pierre Ltd. on 1 January 2014 were 51 cents per share and 38 cents per share respectively. 3) Cash payment of 25 cents per share due on 1 July 2019, and B. For shares bought in Albion Ltd: immediate cash payment of 38 cents per share. The summarized income statement and statement of financial position for the 3 companies are given below: Income statements for the year ended 31 December 2015. Revenue Cost of sales Gross profit Operating and administrative expenses Operating profit Interest expense Profit before tax Income tax expense Profit for the year Port Louis Ltd. Rs. 000 255,500 (175,000) 80,500 (37,500) 43,000 (15,000) 28,000 (8,000) 20,000 St. Pierre Ltd. Rs. 000 195,500 (155,000) 40,500 (35,000) 5,500 (1,000) 4,500 (2,500) 2,000 Albion Ltd. Rs. 000 115,000 (55,500) 59,500 (35,000) 24,500 (3,000) 21,500 (6,000) 15,500 Page 1 of 3 Statements of financial position as at 31 December 2015. Port Louis Ltd. Equity and liabilities Equity shares of 10 cents each Retained earnings Total equity Non-current liabilities Borrowings Current liabilities Total liabilities Total equity and liabilities Albion Ltd. Rs. 000 Assets Non-current assets Property, plant and equipment Investments Current assets Total assets St. Pierre Ltd. Rs. 000 Rs. 000 180,000 22,800 52,000 254,800 185,000 80,000 40,000 225,000 20,000 100,000 40,000 105,000 145,000 60,000 115,000 175,000 15,000 35,000 50,000 65,000 44,800 109,800 254,800 10,000 40,000 50,000 225,000 25,000 25,000 50,000 100,000 The following information is relevant: (i) (ii) (iii) (iv) (v) (vi) Port Louis ltd. paid Rs. 100,000 as legal cost for the acquisition of the shares of St. Pierre Ltd. This cost was accounted under \"Operating and administrative expenses\". For many years St. Pierre Ltd. has been trading some of its product under the brand name of \"Avenir\". At the date of acquisition, the directors of Port Louis valued this brand at Rs. 5 million with a remaining useful life of 10 years. The brand is not included in the St. Pierre's statement of financial position. At acquisition the fair value of St. Pierre's plant exceeded its book value by Rs. 1 million. The plant had a useful life of 5 years. Port Louis Ltd. policy is to value the non-controlling interest at fair value at the date of acquisition. Although St. Pierre Ltd. has been profitable since its acquisition by Port Louis Ltd., the market for St. Pierre's products has been badly hit in recent months and Port Louis has calculated that the goodwill has been impaired by Rs. 3 million as at 31 December 2015. Sales from Port Louis Ltd. to St. Pierre Ltd. throughout the year ended 31 December 2015 had consistently been Rs. 800,000 per month. Port Louis Ltd. made a mark-up on cost of 25% on these sales. St. Pierre Ltd. had Rs. 1.5 million of these goods in inventory as at 31 December 2015. Page 2 of 3 (vii) On 31 December 2015 Port Louis Ltd. accounts showed a trade receivable of Rs. 2 million from St. Pierre Ltd. St. Pierre Ltd. recorded a payment of Rs. 0.5 million on 31 December 2015 which reached Port Louis Ltd.'s bank account on 4th of January 2016. Both companies have positive cash balances. (viii) The cost of capital applicable to Port Louis Ltd. is 15%. The interest expenses of Port Louis Ltd. do not include the finance cost on the deferred consideration. (ix) Ignore any effect of taxation. Required: a. Prepare the consolidated income statement for the Port Louis Group for the year-ended 31 December 2015. b. Prepare the consolidated statement of financial position for the Port Louis Group as at 31 December 2015. Question 2. [25 marks] You work for a leading stock-broker and one of your key client (a large investment holding company) is interested to buy a considerable portion of Phoenix Beverages Limited existing stocks. You have been requested you to prepare an investment report which will guide the client in its decision. Required: Analyse the company's statements of financial position, statements of comprehensive and statement of cash flows over the last 4 financial years (from 2012 to 2015) and prepare an investment report. Your report must cover the following performance areas: i. ii. iii. iv. growth, operating and financial performance, corporate liquidity, financial leverage and short term financial risk that the company is exposed, and corporate valuation. NB: You must not include copies of the financial statements in your report. However, you need to show all your workings. Page 3 of 3