MPA903 Advanced Corporate Reporting Assignment pdf - Adobe Reader File Edit View Window Help CASE STUDY 1: Business Consolidations [50 marks] The following is the extracted financial records from Excel Ltd and its subsidiary Right Ltd at 30 June 2019. Excel Ltd (000) Right Ltd (000) Reconciliation of opening and closing retained earnings Sales revenue 1342.8 1080 less Cost of goods sold -928 -476 Gross Profit 414.8 604 Dividends received from Right 186 Management revenue 53 Gain on sale of plant 80 70 4. ENG 1024 AM 5/25/2020 P 13 MPA903 Advanced Corporate Reporting Assignment pdf - Adobe Reader File Edit View Window Help Gain on sale of plant 80 70 administrative expenses -61.6 -77.4 Depreciation -59 -113.6 Management fee expense -53 Other Expenses -202.2 -144 Profit before tax 411 286 Tax expense 123 84.4 Profit after tax 288 201.6 Retained earnings 30 June 2018 638.8 478.4 926.8 680 Dividends paid -274.8 -186 Retained earnings30 June 2019 652 494 4. ENG 1024 AM 5/25/2020 P 13 MPA903 Advanced Corporate Reporting Assignment pdf - Adobe Reader File Edit View Window Help Statement of financial position Shareholders' equity Retained earnings 652 494 Share capital 700 400 Current liabilities Accounts payable 109.4 92.6 4. ENG 1024 AM 5/25/2020 P 13 MPA903 Advanced Corporate Reporting Assignment pdf - Adobe Reader File Edit View Window Help Accounts payable 109.4 92.6 Tax payable 82.6 50 Non-current liabilities Loans 347 232 1891 1268.8 Current assets Accounts receivable 118.8 124.6 Inventory 184 58 Non-current assets Land 448 652 Plant at cost 599.7 711.6 Accumulated depreciation -171.5 -277.6 RR 4. ENG 1025 AM 5/25/2020 P 13 MPA903 Advanced Corporate Reporting Assignment pdf - Adobe Reader File Edit View Window Help Investment in Right Ltd 712 1891 1268.6 Other Additional Information: . Excel Ltd acquired its 100 per cent interest in Right Ltd on 1 July 2014, that is, five years earlier. At that date the capital and reserves of Right Lid were: Share capital $400 000 Retained earnings $360 000 $760 000 At the date of acquisition all assets were considered to be fairly valued. During the year Excel Ltd made total sales to Right Ltd of $120 000, while Right Ltd sold $100 000 in inventory to Excel Ltd. The opening inventory in Excel Ltd as at 1 July 2018 included inventory acquired from Right Ltd for $80 000 that cost Right Ltd $60 000 to produce. The closing inventory in Excel Ltd includes inventory acquired from Right Ltd at a cost of . (ENG 1025 AM 5/25/2020 P 213 . MPA903 Advanced Corporate Reporting Assignment.pdt - Adobe Reader File Edit View Window Help At the date of acquisition all assets were considered to be fairly valued. During the year Excel Ltd made total sales to Right Ltd of $120 000, while Right Ltd sold $100 000 in inventory to Excel Ltd. The opening inventory in Excel Ltd as at 1 July 2018 included inventory acquired from Right Ltd for $80 000 that cost Right Ltd $60 000 to produce. The closing inventory in Excel Ltd includes inventory acquired from Right Ltd at a cost of $66 000. This cost Right Ltd $56 000 to produce. The closing inventory of Right Ltd includes inventory acquired from Excel Ltd at a cost of $24 000. This cost Excel Ltd $20 000 to produce. . On 1 July 2018 Right Ltd sold an item of plant to Excel Ltd for $232 000 when its carrying value in Right Ltd's accounts 29.04+ A 000, accumulated depreciation $108 000). This plant is assessed as having a remaining useful life of six years. The Group has a . w ENG 1025 AM 5/25/2020 P 213 MPA903 Advanced Corporate Reporting Assignment pdf - Adobe Reader File Edit View Window Help On 1 July 2018 Right Ltd sold an item of plant to Excel Ltd for $232 000 when its carrying value in Right Ltd's accounts was $162 000 (cost $270 000, accumulated depreciation $108 000). This plant is assessed as having a remaining useful life of six years. The Group has a policy of measuring its property, plant and equipment using the cost model'. Right Ltd paid $53 000 in management fees to Excel Ltd. The tax rate is 30 per cent. Required: 1) Prepare consolidated journal entries for the above information as at 30 June 2019. [10 Marks) 2) Prepare a consolidated statement of comprehensive income, a consolidated statement of changes in equity and a consolidated Statement of financial position for Excel Ltd and Right Ltd as at 304 June 2019. You also need to provide the consolidated work sheet. [10+10+5+5=30 Marks) 3) With reference to Excel Ltd's acquisition of Right Ltd. Comment on the appropriateness of the acquisitions as a business strategy on the firm's expansion. [10 marks] w RR 4. ENG 1025 AM 5/25/2020 P 213