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please solve it step by step with workings, Thanks Q.No.1. The Power Limited acquired 80% of the Sami Limited on 1st April 2014, when Sami
please solve it step by step with workings, Thanks
Q.No.1. The Power Limited acquired 80% of the Sami Limited on 1st April 2014, when Sami Limited retained earnings were Rs.630,000. The financial statements of each company for the year ended 31 March 2017 are as follows: Statement of Financial Position as on 31 March 2017 The Power Ltd Sami Ltd 000 000 Non-Current assets Property. Plant & Equipment 1100 600 Investment in Sami Ltd at Cost 900 Current Assets 500 800 Total 2500 1400 400 350 Share Capital ($1) Share Premium 250 Retained Earnings 1550 900 2200 1250 Non-Current Liabilities 100 90 Current Liabilities 200 60 Total 2500 Statement of Profit and Loss for the year ended 31 March 2017 Revenue 1200 460 Cost of Sales 950 280 Gross Profit 250 180 Operating Expenses 60 35 Profit from operations 190 145 25 Interest expenses Investment Income 15 20 Profit before Tax 185 130 Income Tax 100 30 Profit for the year 85 100 Below information are relevant: 1. Sami Ltd had plant in its statement of financial positions at the date of acquisition with a carrying value of Rs. 200,000 but fair value of Rs.220.000. The plant had remaining life 10 years at acquisition. Depreciation is charges to cost of sales. 2. The Power Ltd group values the non-controlling interest at fair value. The fair value of the non-controlling interest at the date of acquisition was Rs. 350,000. Goodwill has been impaired by total of 30% of its value the reporting date, of which 1/3rd related to the current year. 3. At the start of the year Power Ltd transferred a machine to Sami Ltd for Rs.25,000. The asset has remaining useful life of 3 years at the date of transfer. It had a carrying amount of Rs. 17,000 in the books of the Power Ltd at the date of transfer. 4. During the year Sami Ltd sold some goods to the Power Ltd for Rs. 90,000 at the mark up of 25% and 60% of these goods sold during the year. 5. At the year end, Sami Ltd books showed a receivables balance of Rs.10,000 as being due from the Power Ltd. This disagreed with payables balance of Rs.5000 in the Power Ltd due to Power Ltd having sent a cheque to Sami Ltd shortly before the year end which Sami Ltd had not yet received. 6. Sami Ltd paid dividend of Rs. 20,000 on 1 March 2017. Required: Prepare the consolidated statement of financial position and consolidated statement of profit or loss for the year ended 31 March 2017 for the Power Ltd groupStep by Step Solution
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