Phn t lun 5 im ( 1)

Altona is the parent company of Leicester. The following are their financial statements.

Statement of Profit or Loss for the year ended 31 December 20X8

	Altona	Leicester
	$000	$000
Sales revenue	6,400	2,600
Cost of sales	(3,500)	(1,500)
Gross profit	2,900	1,100
Distribution costs	(700)	(320)
Administrative expenses	(1,000)	(500)
Dividend income from Leicester	500
Profit before tax	1700	280
Tax	(340)	(56)
Profit for the year	1,360	224

Statement of Financial Position as at 31 December 20X8

	Altona	Leicester
	$000	$000
Assets
Non-current assets
Property, plant and equipment at cost	3,350	3,200
Investment in Leicester	3,500
Current assets
Inventory	1,500	800
Receivables	1,800	750
Cash	600	350
Total assets	10,750	5,100
Equity and Liabilities
Equity
50c ordinary shares	9,000	4,400
Retained earnings	450	200
Current liabilities
Trade payables	1,300	500
Total equity and liabilities	10,750	5,100

Additional information:

(a) Altona purchased 6,600,000 shares in Leicester several years ago when Leicester had retained earnings of $50,000. The fair value of the non-controlling interest at the date of acquisition was $1,600,000.

(b) During the year Altona sold goods with a selling price of $320,000 to Leicester. These goods were sold at a margin of 20%. Half of the goods are still in inventory at the year end

(c) Leicester owes Altona $40,000 at 31 December 20X8.

Task 1: Complete the following to determine goodwill at acquisition (0,5 im)

	$'000
Consideration transferred
Fair value of Non-controlling interest at acquisition date
Total cost of investment
Less value of identifiable assets acquired and liabilities assumed
Ordinary share
Retained earnings at acquisition
Total net assets
Goodwill

Task 2: What is the amount of the unrealised profit on the intragroup sale? (0,5 im)

	$'000
Sales
COGS
Gross profit
Unrealized profit

Task 3: Complete the following to determine consolidated retained earnings (0,5 im)

	Altona $'000	Leicester $'000
Per question
Unrealized profit atributable to group
Pre-acquisition retained earnings
Total
Group share of Leicester
Group retained earning

Task 4: Fill in the blanks to calculate the amount of non-controlling interest in the consolidated Statement of financial position: (0,5 im)

	$'000
Fair value of NCI at acquisition date
NCI 's share of post-acquisition retained earnings
NCI at reporting date

Task 5: Complete the consolidated statement of profit or loss (1,5 im)

	$'000
Sales revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Dividend
Profit before tax
Tax
Profit for the year
Profit atributable to:
Owner of the parent
Non-controlling interest

Task 6: Complete the consolidated statement of financial position (1,5 im)

	$'000
Assets
Non-current assets
Current assets
Total assets
Equity and liabilities
Equity
Liabilities
Total equity and liabilities