Question 2 Coquines in the heat belon. Statement of Financial than a be Accounts receive Cash Bewer 000 he no 720.000 1300 1000 0.000 395.000 000000 550,000 Accounts payable Share capital Retained earnings 50.000 400.000 450,000 5900.000 5995.000 Fair value of consideration paid by P.Co $935,000 Fair value of non-controlling interests at woquisition date $165,000 Income Statement for the year ended 31 December 2015 Z Co Net profit before tax (including dividend income) $670,000 Less tax expense (134,000) Net profit after tax 536,000 Less dividends declared (300,000) Profit retained for the year 236,000 Retained earnings, 1 January 450.000 Retained earings, 31 December $686,000 Additional information! 1. Information pertaining to fair value adjustments at acquisition date: Remaining useful life of undervalued fixed asset as at 1 January 2015 was five years. Undervalued inventory was sold in 2015. Overvalued accounts receivable was written down for a potential bad debt. The debt was confirmed bad in 20x5 and written off in Subsidiary's books in 2015. 2. On 31 December 20x5, total goodwill was assessed to be impaired to the extent of $80, 3. Assume a tax rate of 20%. Recognize tax effects on fair value adjustments. Required (@) What is the goodwill arising from the application of the requirements of IFRS Combinations? (b) Prepare the consolidation adjustments for the year ended 31 December 2015. [16 ma 14 mar Question 2 Coquines in the heat belon. Statement of Financial than a be Accounts receive Cash Bewer 000 he no 720.000 1300 1000 0.000 395.000 000000 550,000 Accounts payable Share capital Retained earnings 50.000 400.000 450,000 5900.000 5995.000 Fair value of consideration paid by P.Co $935,000 Fair value of non-controlling interests at woquisition date $165,000 Income Statement for the year ended 31 December 2015 Z Co Net profit before tax (including dividend income) $670,000 Less tax expense (134,000) Net profit after tax 536,000 Less dividends declared (300,000) Profit retained for the year 236,000 Retained earnings, 1 January 450.000 Retained earings, 31 December $686,000 Additional information! 1. Information pertaining to fair value adjustments at acquisition date: Remaining useful life of undervalued fixed asset as at 1 January 2015 was five years. Undervalued inventory was sold in 2015. Overvalued accounts receivable was written down for a potential bad debt. The debt was confirmed bad in 20x5 and written off in Subsidiary's books in 2015. 2. On 31 December 20x5, total goodwill was assessed to be impaired to the extent of $80, 3. Assume a tax rate of 20%. Recognize tax effects on fair value adjustments. Required (@) What is the goodwill arising from the application of the requirements of IFRS Combinations? (b) Prepare the consolidation adjustments for the year ended 31 December 2015. [16 ma 14 mar
