PART A

PART B

Part (a):

1.What is the amount of unrealised profit to be eliminated in the consolidated financial statements of Back Group for the year ended 31 December 2019?

A.500,000

B.25,000

C.100,000

D.125,000

2. What is the amount of inter-company sales to be eliminated in the consolidated financial statements of Back Group for the year ended 31 December 2019?

A.500,000

B.525,000

C.625,000

D.375,000

3. What is the depreciation on the fair value adjustment to be included in the consolidated financial statements of Back Group for the year ended 31 December 2019?

A.600,000

B.60,000

C.15,000

D.480,000

4. What is the profit attributable to the owners of the parent in the statement of profit or loss and other comprehensive income of Back Group for the year ended 31 December 2019?

A.1,210,000

B.1,870,000

C.3,040,000

D.2,806,000

5. What is the profit attributable to the non-controlling interests in the statement of profit or loss and other comprehensive income of Back Group for the year ended 31 December 2019?

A.3,040,000

B.1,870,000

C.234,000

D.1,210,000

Part (b):

6.What is the amount of goodwill arising on the acquisition of Union Limited by Customs plc on 1 January 2010?

A.47,000

B.60,000

C.12,000

D.95,000

7. What is the carrying value of goodwill in the consolidated statement of financial position of Customs plc at 31 December 2019?

A.89,000

B.95,000

C.94,000

D.47,000

8. What is the amount to be included for non-controlling interests in the consolidated statement of financial position of Customs plc at 31 December 2019?

A.34,200

B.69,200

C.171,200

D.331,200

9.What is the amount to be included for consolidated retained earnings in the consolidated statement of financial position of Customs plc at 31 December 2019?

A.615,000

B.300,000

C.992,000

D.677,000

+ Statements of Profit or Loss and Other Comprehensive Income for the Year Ended 31 December 2019 Back plc Stop Limited '000 '000 Revenue 28,900 9,100 Cost of sales (14,800) (4,120) Gross profit 14,100 4,980 Administration costs (6,300) (1,450) Selling and distribution costs (4,980) (1,890) Finance cost _(440) _(150) Profit before tax 2,380 1,490 Income tax expense (510) (280 Profit for the year 1,870 1.210 + Additional Information 1. On 1 January 2018, Back plc purchased 80% of the 1 ordinary shares in Stop Limited at a cost of 5,900,000. At the acquisition date, the fair value of assets was equal to their carrying amount with the exception of property that had a fair value greater than its carrying amount by 600,000. The remaining useful life of the property was 40 years on 1 January 2018 2. The goodwill arising on the acquisition of Stop Limited has not been impaired. 3. During the year ended 31 December 2019, Stop Limited sold goods worth 500,000 to Back plc. One fifth of these goods was still on hand at 31 December 2019. Stop Limited sets its selling price to achieve a margin of 25%. + Statements of Financial Position as at 31 December 2019 Customs plc Union Limited '000 E$'000 Assets Non-current assets Property, plant and equipment 740 815 Investment in Union Limited at cost 95 835 815 Current assets Inventory 85 60 Receivables 215 80 Cash in hand and at bank 87 20 387 160 1.222 975 Equity and Liabilities Equity Called up share capital 300 500 Retained earnings 615 355 915 855 Current liabilities 307 120 1.222 975 + Additional Information 1. On 1 January 2010 Customs plc purchased 80% of the shares of Union Limited, a company incorporated and operating in a country whose currency is the Eurasian dollar (ES). The retained eamings of Union Limited amounted to E$100,000 on 1 January 2010. For the purposes of measuring non-controlling interests at the date of acquisition, the proportionate share method equated to the fair value method Goodwill was impaired for the first time by 5,000 during the year ended 31 December 2019. 2. The financial statements for the year ended 31 December 2019 included the following: Customs plc '000 370 9 (160) Union Limited ES'000 297 Operating profit Dividend received from Union Limited Taxation charge Dividend paid Profit retained for the financial (77) (60) 160 year 219 No other dividends were paid or proposed by either company. 3. The following exchange rates have been ascertained: 1 January 2010 31 December 2018 31 December 2019 Average rate for the year ended 31 December 2019 ES10 = -1 E$6 = 1 ES5 = 1 E$5.5 = 1