MPA903 Advanced Corporate Reporting Assignment pdt - Adobe Reader File Edit View Window Help CASE STUDY 1: Business Consolidations 150 marks The following is the extracted financial records from Excel Lid anki its subsidiary Right Lid at 30 June 2019, Excel Ltd (000) Right Ltd (000) Reconciliation of opening and closing retained earnings Sales revente 1342.8 1080 less Cost of goods sold -928 - 176 Cross Profit 414.8 604 Dividends received from Right 186 53 SD 70 -61.6 -59 -113.6 Management revenue Gain on sale of plant aduministrative expenses Depreciation Management fee expense Other Expenses Profit before tax Tax expertise Protit after tax Relained earnings 30 June 2018 -2022 -144 411 286 123 84.4 288 2016 638.8 478.4 926.8 680 Dividends paid -274. -186 Retained earnings30 June 2019 652 494 V e CA RR ENC 9:49 AM 5/25/2020 13 MPA903 Advanced Corporate Reporting Assignment pdt - Adobe Reader File Edit View Window Help Dividends paid -274.8 -186 Retained earnings30 June 2019 494 Statement of financial position Shareholders' equity Retained earnings 652 494 Share capital 700 400 Current liabilities 109.4 92.6 Accounts payable Tax payable Non-current liabilities 82.6 50 Loans 347 1821 1268.8 Current assets Accounts receivable 118.8 124.6 Inventory 184 58 Non-current assets Land 448 652 Pla al cost 599.7 711.6 Acciated decision V .2775 . e RR ENC 950 AM 5/25/2020 13 MPA903 Advanced Corporate Reporting Assignment pdt - Adobe Reader File Edit View Window Help Accumulated depreciation -171.5 -277.6 Investment in Right Lid 712 1891 12686 Other Additional Information: Excel Ltd acquired its 100 per cent interest in Right Led on 1 July 2014, that is, five years earlier. At that date the capital and reserves of Right Ltd were Share capital $400 000 Retnined earnings $360 000 $760 000 At the date of acquisition all assets were considered to be farly valued During the year Excel Ltd made total sales to Right Ltd of $120 000, while Right Ltd sold $100 000 inventory to Excel Lid. The opening inventory in Excel Ltd as at 1 July 2018 included inventory acquired from Right Ltd for $80 000 that cost Right Led $60.000 to produce The closing investory in Excel Ltd includes inventory acquired from Raght Ltd at a cost of $66 000. This cost Right Ltd $56 000 to produce. The closing investory 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 was $162 000 (cost $270 000, accumulated deprecintion 5108 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 Lid paid $53 000 in management fees to Excel Ltd. The tax rate is 30 per cent V e RR ENC 950 AM 5/25/2020 13 MPAYO3 Advanced Corporate Reporting Assignment pdt - Adobe Reader File Edit View Window Help Required: 1) Prepare consolidated journal entries for the above information as at 30 June 2019 [10 Marks 2) Prepare a consolidated statement of comprebensive income, a consolidated statement of changes in equity and a consoladated Statement of financial posataun for Excel Lid and Right Ad as at 30 June 2019 You also need to provide the consolidated work sheet [10+10+5+5-30 Marks 3) With reference to Excel Tod's acquisition of Right Idd Comment on the appropriateness of the acquisitions as a business strategy on the firm's expansion. [10 marks) A RR ENG 950 AM 5/25/2020 MPA903 Advanced Corporate Reporting Assignment pdt - Adobe Reader File Edit View Window Help CASE STUDY 1: Business Consolidations 150 marks The following is the extracted financial records from Excel Lid anki its subsidiary Right Lid at 30 June 2019, Excel Ltd (000) Right Ltd (000) Reconciliation of opening and closing retained earnings Sales revente 1342.8 1080 less Cost of goods sold -928 - 176 Cross Profit 414.8 604 Dividends received from Right 186 53 SD 70 -61.6 -59 -113.6 Management revenue Gain on sale of plant aduministrative expenses Depreciation Management fee expense Other Expenses Profit before tax Tax expertise Protit after tax Relained earnings 30 June 2018 -2022 -144 411 286 123 84.4 288 2016 638.8 478.4 926.8 680 Dividends paid -274. -186 Retained earnings30 June 2019 652 494 V e CA RR ENC 9:49 AM 5/25/2020 13 MPA903 Advanced Corporate Reporting Assignment pdt - Adobe Reader File Edit View Window Help Dividends paid -274.8 -186 Retained earnings30 June 2019 494 Statement of financial position Shareholders' equity Retained earnings 652 494 Share capital 700 400 Current liabilities 109.4 92.6 Accounts payable Tax payable Non-current liabilities 82.6 50 Loans 347 1821 1268.8 Current assets Accounts receivable 118.8 124.6 Inventory 184 58 Non-current assets Land 448 652 Pla al cost 599.7 711.6 Acciated decision V .2775 . e RR ENC 950 AM 5/25/2020 13 MPA903 Advanced Corporate Reporting Assignment pdt - Adobe Reader File Edit View Window Help Accumulated depreciation -171.5 -277.6 Investment in Right Lid 712 1891 12686 Other Additional Information: Excel Ltd acquired its 100 per cent interest in Right Led on 1 July 2014, that is, five years earlier. At that date the capital and reserves of Right Ltd were Share capital $400 000 Retnined earnings $360 000 $760 000 At the date of acquisition all assets were considered to be farly valued During the year Excel Ltd made total sales to Right Ltd of $120 000, while Right Ltd sold $100 000 inventory to Excel Lid. The opening inventory in Excel Ltd as at 1 July 2018 included inventory acquired from Right Ltd for $80 000 that cost Right Led $60.000 to produce The closing investory in Excel Ltd includes inventory acquired from Raght Ltd at a cost of $66 000. This cost Right Ltd $56 000 to produce. The closing investory 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 was $162 000 (cost $270 000, accumulated deprecintion 5108 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 Lid paid $53 000 in management fees to Excel Ltd. The tax rate is 30 per cent V e RR ENC 950 AM 5/25/2020 13 MPAYO3 Advanced Corporate Reporting Assignment pdt - Adobe Reader File Edit View Window Help Required: 1) Prepare consolidated journal entries for the above information as at 30 June 2019 [10 Marks 2) Prepare a consolidated statement of comprebensive income, a consolidated statement of changes in equity and a consoladated Statement of financial posataun for Excel Lid and Right Ad as at 30 June 2019 You also need to provide the consolidated work sheet [10+10+5+5-30 Marks 3) With reference to Excel Tod's acquisition of Right Idd Comment on the appropriateness of the acquisitions as a business strategy on the firm's expansion. [10 marks) A RR ENG 950 AM 5/25/2020