Question No.02 The financial staternents of Europa PLC and Ganymede PLC are given below. The Statements of Profit or Loss and Other Comprehensive Income for the year ended 31.03.2019. Europa PLC Ganymede PLC Rs'000 Rs'000 130,000 55,000 (64,000) (29,000) 66,000 26,000 8,000 2,500 (32,000) (14,850) (3.000) (1.500) Profit before tax 39,000 12,150 Income tax (4.500 (2.650) Revenue Cost of sales Gross profit Other income Operating expenses Pinance cost Profit for the year 34,500 9,500 Other comprehensive income Revaluation surplus Total comprehensive income 5,500 1,500 40,000 11,000 Statements of Financial Positions as at 31.03.2019. Europa PLC Ganymede PLC Rs. '000 Rs. '000 Non-current Assets Property, plant & equipment Investments 83,000 50,500 47,000 5,500 Current Assets Inventories 9,800 5,250 Receivables 8,750 3,500 Cash and cash equivalents 1,450 750 150,000 65,500 Equity Sated Capital- Ordinary Shares (Rs.10 each) 80,000 30,000 Retained earnings Revaluation surplus 33,200 20,000 NCL 12,000 5,500 12%, Rs.1,000, Debentures Current Liabilities Payables 15,000 4,500 9,800 5,500 150,000 65,500 The following additional information is also available. 1. Europa PLC Acquired 70% of stated capital of Ganymede PLC on 01.04.2018 for Rs.40 million when the retained earnings and revaluation reserves of Ganymede PLC were Rs.8 million and revaluation reserves were Rs.3 million. 2. The fair values of indefinable assets and liabilities of Ganymede PLC at the date of acquisition was Rs.45 million and any difference between the fair values of net assets and the carrying amount of Ganymede PLC was due the change in value of land. The market price of a share of Ganymede PLC on this date was Rs.18. 3. Revenue of Europa PLC includes Rs.6 million sales made to Ganymede PLC and the revenue of Ganymede PLC includes Rs.4 million sales made to Europa PLC during the year ending 31.03.2019. 4. Europa PLC sells goods to Ganymede PLC by adding 20% profit mark-up to the cost. Inventories of Ganymede PLC includes Rs.3 million goods purchased from Europa PLC. 5. Ganymede PLC sells goods to Europa PLC with 20% profit margin on the selling price. All the goods purchased by Europa PLC from Ganymede PLC during the year ending 31.03.2019 were remained unsold at Europa PLC at the year end. 6. Receivable balance of Europa PLC includes Rs.3.5 million receivables from Ganymede PLC. But payable balance of Ganymede PLC includes only Rs.3 million payables to Europa PLC. This difference is due to cash in transit. 7. During the year Ganymede PLC has paid interim dividends of Rs.3 million and Europa PLC has recorded the dividend received from Europa PLC within other income, 8. During the year ending 31.03.2019, Ganymede PLC has paid Rs.1.2 million rent to Europa PLC for the use of building owned by Europa PLC. 9. Ganymede PLC issued 12%, Rs.1,000, debentures on 01.04.2018 and Europa PLC has invested 50% of these debentures on that day. Interest on debentures for the year ending 31.03.2019 was paid by the Ganymede PLC and Europa PLC has properly accounted for the interest received. 10. On 31.03.2019 Ganymede PLC sold a plant with carrying amount of Rs.4.2 million for Rs.5.7 million to Europa PLC. Prepare the following financial statement of Europa Group. 7/11 a. Consolidated Statement of Profit or Loss for the year ending 31.03.2019 (12 Marks) b. Consolidated Statement of Financial Position as at 31.03.2019 (18 Marks) (Cleary show the workings for calculation of goodwill, non-controlling interest, consolidated retained earning and consolidated revaluation reserves) (Total 30 Marks) Question No.02 The financial staternents of Europa PLC and Ganymede PLC are given below. The Statements of Profit or Loss and Other Comprehensive Income for the year ended 31.03.2019. Europa PLC Ganymede PLC Rs'000 Rs'000 130,000 55,000 (64,000) (29,000) 66,000 26,000 8,000 2,500 (32,000) (14,850) (3.000) (1.500) Profit before tax 39,000 12,150 Income tax (4.500 (2.650) Revenue Cost of sales Gross profit Other income Operating expenses Pinance cost Profit for the year 34,500 9,500 Other comprehensive income Revaluation surplus Total comprehensive income 5,500 1,500 40,000 11,000 Statements of Financial Positions as at 31.03.2019. Europa PLC Ganymede PLC Rs. '000 Rs. '000 Non-current Assets Property, plant & equipment Investments 83,000 50,500 47,000 5,500 Current Assets Inventories 9,800 5,250 Receivables 8,750 3,500 Cash and cash equivalents 1,450 750 150,000 65,500 Equity Sated Capital- Ordinary Shares (Rs.10 each) 80,000 30,000 Retained earnings Revaluation surplus 33,200 20,000 NCL 12,000 5,500 12%, Rs.1,000, Debentures Current Liabilities Payables 15,000 4,500 9,800 5,500 150,000 65,500 The following additional information is also available. 1. Europa PLC Acquired 70% of stated capital of Ganymede PLC on 01.04.2018 for Rs.40 million when the retained earnings and revaluation reserves of Ganymede PLC were Rs.8 million and revaluation reserves were Rs.3 million. 2. The fair values of indefinable assets and liabilities of Ganymede PLC at the date of acquisition was Rs.45 million and any difference between the fair values of net assets and the carrying amount of Ganymede PLC was due the change in value of land. The market price of a share of Ganymede PLC on this date was Rs.18. 3. Revenue of Europa PLC includes Rs.6 million sales made to Ganymede PLC and the revenue of Ganymede PLC includes Rs.4 million sales made to Europa PLC during the year ending 31.03.2019. 4. Europa PLC sells goods to Ganymede PLC by adding 20% profit mark-up to the cost. Inventories of Ganymede PLC includes Rs.3 million goods purchased from Europa PLC. 5. Ganymede PLC sells goods to Europa PLC with 20% profit margin on the selling price. All the goods purchased by Europa PLC from Ganymede PLC during the year ending 31.03.2019 were remained unsold at Europa PLC at the year end. 6. Receivable balance of Europa PLC includes Rs.3.5 million receivables from Ganymede PLC. But payable balance of Ganymede PLC includes only Rs.3 million payables to Europa PLC. This difference is due to cash in transit. 7. During the year Ganymede PLC has paid interim dividends of Rs.3 million and Europa PLC has recorded the dividend received from Europa PLC within other income, 8. During the year ending 31.03.2019, Ganymede PLC has paid Rs.1.2 million rent to Europa PLC for the use of building owned by Europa PLC. 9. Ganymede PLC issued 12%, Rs.1,000, debentures on 01.04.2018 and Europa PLC has invested 50% of these debentures on that day. Interest on debentures for the year ending 31.03.2019 was paid by the Ganymede PLC and Europa PLC has properly accounted for the interest received. 10. On 31.03.2019 Ganymede PLC sold a plant with carrying amount of Rs.4.2 million for Rs.5.7 million to Europa PLC. Prepare the following financial statement of Europa Group. 7/11 a. Consolidated Statement of Profit or Loss for the year ending 31.03.2019 (12 Marks) b. Consolidated Statement of Financial Position as at 31.03.2019 (18 Marks) (Cleary show the workings for calculation of goodwill, non-controlling interest, consolidated retained earning and consolidated revaluation reserves) (Total 30 Marks)