PIO-3 Please do not copy other answers. This is a different question. If copied from other answers I will downvote and report your account .

Q2.

Delta prepares financial statements to 31 March each year. Delta has a number of subsidiaries which business sectors. The following exhibits, available on the left-hand side of the screen, provide information relevant to t 1. Cattle and sheep - details of the cattle and sheep herds owned by subsidiary Omega which oper 2. Purchase of shares - details of the purchase of shares in a trading portfolio by subsidiary Kappa 3. Acquisition of subsidiary information on the acquisition of subsidiary Zeta including the fair valu This information should be used to answer the question requirements within your chosen response Omega has a herd of 300 cattle which are all six months old on 31 March 20x5 and a herd of 200 sheep which are all one year old at 31 March 20X5. The herd of cattle will be sold when the cattle are two years old. The herd of sheep is expected to be sold within the next 12 months. There are two markets available to Omega in which they could sell the cattle and the sheep, Market 1 and Market 2. Market 1 is the principal market in which cattle could be sold but Omega sells its sheep in both Market 1 and Market 2 in roughly equal proportions. Therefore, neither Market 1 nor Market 2 can be identified as the principal market in which Omega could sell sheep. Relevant market prices and relevant costs of sale at 31 March 20x5 are as follows: Market 1 Market 2 Cattle Sheep Cattle Sheep $ $ $ $ Gross selling price per animal 80 61 85 63 Transport costs per animal 4 3 5 4 Selling costs per animal 2 2 3 4 Kappa has a portfolio of equity shares which is regarded as a trading portfolio. On 1 January 20x5 Kappa purchased 20,000 shares in a listed entity and added these shares to the trading portfolio. Kappa purchased the shares for $5-25 per share and paid a commission to the broker of 20 cents per share. Due to favourable market conditions Kappa retained these shares and they were still part of the trading portfolio at 31 March 20X5. These shares are listed on a single stock exchange. Relevant market prices (per share) are as follows: Date Bid price Offer price $ $ 1 January 20X5 5-00 5-25 31 March 20X5 5-80 6-10 On 1 October 20X4 Delta acquired a new subsidiary, Zeta. The net assets of Zeta included a factory with a carrying amount of $6 million. $3-2 million of this amount was attributable to the buildings element. The useful life of the buildings element at 1 October 20X4 is 40 years. Delta intends to continue to use the factory for the same purpose as it was being used by Zeta prior to its acquisition. However, the factory could be used for administrative purposes with virtually no conversion costs. Relevant fair value measurements for the factory at 1 October 20X4 are as follows: Land Buildings Total Future life element element of buildings $ million $ million $ million element Use as a factory 3-4 3-8 7-2 40 years Use for administrative purposes 3-5 4-0 7-5 Delta uses the cost model to measure its property, plant and equipment in its consolidated financial statements. 50 years Using the information in exhibits 1 - 3, explain and compute the amounts that would be recognised by Delta in its consolidated financial statements for the year ended 31 March 20X5 and state where in these financial statements they should be presented. Marks will be awarded for BOTH calculations AND explanations. You are the financial controller of Epsilon, a listed entity with a number of subsidiaries. The consolidat Epsilon for the year ended 31 March 2005 are currently being prepared. One of the directors of Epsilo which have arisen as a result of her review of the draft consolidated financial statements. The following exhibits, available on the left-hand side of the screen, provide information relevant to th 1. 2. 3. New subsidiary the financial statements of Newby. Investment - details of an equity investment. Measurement change - details of a change in measurement method of inventory. This information should be used to answer the question requirements within the response option pr You will know that during the year we made a strategic long-term Investment in Sandy, an entity which is a vital part of our supply chain. I belleve we purchased 40% of the shares, which carry one vote cach, and that this gave us the right to appoint four of the ten directors. The other six directors are independent of each other, they don't always agree when voting. I was expecting to see Sandy included as a subsidiary in our consolidated financial statements but instead the Investment has been shown as a single figure in our consolidated statement of financial position. The carrying amount of the investment is presented as $40 million but, given the share price, I have calculated the fair value as $42 million. I thought that equity Investments that weren't consolidated needed to be measured at fair value. Please explain: 1. Why we aren't including Sandy as a subsidiary in our consolidated financial statements. 2. What method will have been used to arrive at the carrying amount of $40 million rather than measuring the investment at falr value. The draft financial statements indicate that in the current period we began measuring our inventory of raw materials using the weighted average cost formula. In previous periods we measured all our inventories using the first in first out formula. I have a number of questions here: 1. Are we allowed to change the measurement method in this way? 2. If we do change the measurement method for our inventory of raw materials shouldn't we change it for all of our inventories? 3. How do we ensure that the financial statements for this year are comparable with those of last year given that a different measurement method has been used for raw materials inventory I know during the year ended 31 March 20X5 we acquired Newby. Newby is a small company which operates in the construction industry. I also know that the shares in Newby were previously owned equally by three family members, and that Newby's borrowing was a bank loan. I had a look at Newby's audited individual financial statements for the current year. The audit report identified no issues with how the financial statements had been prepared but I don't understand how this can be correct. Newby is located in the same country as we are and is subject to the same regulatory regime. The financial statements of Newby do not appear to be wholly compliant with full International Financial Reporting Standards (IFRS standards). For example, the notes to Newby's financial statements state that all borrowing costs are expensed as they are incurred despite some of these borrowings relating to the construction of a new factory. Furthermore, the notes to Newby's financial statements don't appear to contain all the disclosures required by full IFRS standards. Please can you answer the following questions (I don't need to know the mechanics of the consolidation process - I know that already): 1. Please explain why Newby has been allowed to prepare individual financial statements which don't appear to wholly comply with full IFRS standards. 2. Please explain if Newby will need to use full IFRS standards in its own financial statements now that it's part of our group. Provide answers to the queries raised by one of Epsilon's directors relating to the consolidated financial statements for the year ended 31 March 20X5. The queries you need to address appear in exhibits 1 - 3