QUESTION TWO a) The following summarized trial balances pertain to Takoradia Led and its subsidiary Accra Ltd for the year ended 31 December 2018: Takoradi Lad Accra Lid Debit Card Debit Credit GHem GHem GHem GHem Sales 5.177 3.996 Cost of sales 3.255 2.448 Operating expenses 713 636 Other Income 18 Tax expense 403 289 Share capital (GHe 10 each) 3.720 1.600 Share premium 1.430 322 Retained earnings as at 1 January 2018 2.233 516 Page 3 of 6 350 Current liabilities 713 651 Property, plant and equipment 5.418 1,934 Investments 1.600 Loan to AL's Director 10 Current assets 2.284 1.797 2.68 I16 ZIOS ZLOG Additional Information: (1 Takoradi Lid acquired 96 million shares of Accra Lid cn I May 2018 at following consideration: Cash payment of GHe 450 million and Issuance of 40 million shares of Takoradi Ltd at GHe 25 each (11) On acquisition date carrying values of Accra Lid's net assets were equal to fair value except the following: A building whose fair values and value in se were GH 390 million and GHE 520 million respectively as against carrying value of GH 480 million. The group follows cost model for subsequent measurement of property, plant and equipment. The remaining life of bullding on acquisition date was 20 years. Fair value of the building has increased to GHC 440 million at 31 December 2018 A brand which had not been recognized by Acer Lid. The fair value of the brand was assessed at GH 162 million. It is estimated that benefit would be obtained from the brand for the next 6 years (111) Takoradi Lid measures the non-controlling Interest at fair value. On the date of acquisition, the market price of Acera Lads shares was GHe 14 per share (lv) On 1 July 2018 Takoradi Lad sold an equipment to Accra Lid for GH 250 million at a gain of GH 20 million Accra Ltd has charged depreciation of GHe 125 million on this equipment. (v) In each month of 2018, Accra Lad sold goods costing GHe 40 million to Takoradi Ltd at cost plus 20%. At year end, 75% of the goods purchased in December were included in stock of Takoradi Ltd (v1) Accra Led's credit balance of GH 38 million in Takorade Lid's books does not agree with Accra Lid's books due to GHe 7 million charged by Takoradi Ltd for management service on 26 December 2018. Total management fee charged by Takoradi Lid to Accra Lid since acquisition amounted to GHe 16 million (VII) Accra Ltd declared interim cash dividend of GHC 0.50 per share in December 2018 Takoradi Ltd has correctly recorded the divided in ts books. However, Accra Lid has not yet accounted for the dividend. (VIII The Incomes and expenses of Accra Lid may be assumed to have accrued evenly during the year. Required: Prepare the following Consolidated statement of profit or loss for the year ended 31 December 2018. (12 marks] Consolidated statement of Financial position as at 31 December 2018 [15marks i. 11 QUESTION TWO a) The following summarized trial balances pertain to Takoradia Led and its subsidiary Accra Ltd for the year ended 31 December 2018: Takoradi Lad Accra Lid Debit Card Debit Credit GHem GHem GHem GHem Sales 5.177 3.996 Cost of sales 3.255 2.448 Operating expenses 713 636 Other Income 18 Tax expense 403 289 Share capital (GHe 10 each) 3.720 1.600 Share premium 1.430 322 Retained earnings as at 1 January 2018 2.233 516 Page 3 of 6 350 Current liabilities 713 651 Property, plant and equipment 5.418 1,934 Investments 1.600 Loan to AL's Director 10 Current assets 2.284 1.797 2.68 I16 ZIOS ZLOG Additional Information: (1 Takoradi Lid acquired 96 million shares of Accra Lid cn I May 2018 at following consideration: Cash payment of GHe 450 million and Issuance of 40 million shares of Takoradi Ltd at GHe 25 each (11) On acquisition date carrying values of Accra Lid's net assets were equal to fair value except the following: A building whose fair values and value in se were GH 390 million and GHE 520 million respectively as against carrying value of GH 480 million. The group follows cost model for subsequent measurement of property, plant and equipment. The remaining life of bullding on acquisition date was 20 years. Fair value of the building has increased to GHC 440 million at 31 December 2018 A brand which had not been recognized by Acer Lid. The fair value of the brand was assessed at GH 162 million. It is estimated that benefit would be obtained from the brand for the next 6 years (111) Takoradi Lid measures the non-controlling Interest at fair value. On the date of acquisition, the market price of Acera Lads shares was GHe 14 per share (lv) On 1 July 2018 Takoradi Lad sold an equipment to Accra Lid for GH 250 million at a gain of GH 20 million Accra Ltd has charged depreciation of GHe 125 million on this equipment. (v) In each month of 2018, Accra Lad sold goods costing GHe 40 million to Takoradi Ltd at cost plus 20%. At year end, 75% of the goods purchased in December were included in stock of Takoradi Ltd (v1) Accra Led's credit balance of GH 38 million in Takorade Lid's books does not agree with Accra Lid's books due to GHe 7 million charged by Takoradi Ltd for management service on 26 December 2018. Total management fee charged by Takoradi Lid to Accra Lid since acquisition amounted to GHe 16 million (VII) Accra Ltd declared interim cash dividend of GHC 0.50 per share in December 2018 Takoradi Ltd has correctly recorded the divided in ts books. However, Accra Lid has not yet accounted for the dividend. (VIII The Incomes and expenses of Accra Lid may be assumed to have accrued evenly during the year. Required: Prepare the following Consolidated statement of profit or loss for the year ended 31 December 2018. (12 marks] Consolidated statement of Financial position as at 31 December 2018 [15marks i. 11