Question 1 1 Harry has just noquired 80% of the shares in Hermione for 3.40 per share. The respective balance sheets of the two companies are as follows and the fair value of Hermione's assets are estimated to be 80,000 (L&B), 30,000 (Plant) and 20,000 (Other assets). Produce consolidated balance sheets for Harry Group based on: ) The proprietary concept b) The entity concept C) The proprietary concept: parent company extension d) The proprietary concept: proportional consolidation Harry Hermione 000 6000 Investment in Hermione 136 L&B 120 Plant 20 Other assets 356 40 80 20 10 70 Share capital (El shares) Reserves (P&L) 200 156 356 50 20 70 Question 2 This question requires you to prepare a consolidated balance sheet post-acquisition date. The actual date of acquisition is not necessarily identified in the question, with the value of reserves of subsidiary given in the question. The post-acquisition date is 30 September 20X3. Use parent company extension method to prepare the consolidated balance sheet. Harry acquired 80% of the shares in Hermione for 1.40 per share when Hermione's reserves (profit and loss account) were 10,000. The respective balance sheets of the two companies at 30 September 20x3 are as follows. Produce a consolidated balance sheet for Harry Group as at 30 September 20X3. Harry Hermione 000 Investment in Hermione L&B Plant Other assets 000 56 120 80 20 276 40 20 10 70 Share capital (El shares) Reserves (P&L) 200 76 276 Question 1 1 Harry has just noquired 80% of the shares in Hermione for 3.40 per share. The respective balance sheets of the two companies are as follows and the fair value of Hermione's assets are estimated to be 80,000 (L&B), 30,000 (Plant) and 20,000 (Other assets). Produce consolidated balance sheets for Harry Group based on: ) The proprietary concept b) The entity concept C) The proprietary concept: parent company extension d) The proprietary concept: proportional consolidation Harry Hermione 000 6000 Investment in Hermione 136 L&B 120 Plant 20 Other assets 356 40 80 20 10 70 Share capital (El shares) Reserves (P&L) 200 156 356 50 20 70 Question 2 This question requires you to prepare a consolidated balance sheet post-acquisition date. The actual date of acquisition is not necessarily identified in the question, with the value of reserves of subsidiary given in the question. The post-acquisition date is 30 September 20X3. Use parent company extension method to prepare the consolidated balance sheet. Harry acquired 80% of the shares in Hermione for 1.40 per share when Hermione's reserves (profit and loss account) were 10,000. The respective balance sheets of the two companies at 30 September 20x3 are as follows. Produce a consolidated balance sheet for Harry Group as at 30 September 20X3. Harry Hermione 000 Investment in Hermione L&B Plant Other assets 000 56 120 80 20 276 40 20 10 70 Share capital (El shares) Reserves (P&L) 200 76 276
