Question
Task B ( DO NOT SOLVE IN PAPER) Blueberry PLC and Apple PLC The following are the draft statement of Financial Position of Blueberry PLC
Task B ( DO NOT SOLVE IN PAPER)
Blueberry PLC and Apple PLC The following are the draft statement of Financial Position of Blueberry PLC and its subsidiary Apple PLC as at 31st December 2020 are given below:
Blueberry PLC | Apple PLC | |
Assets | $ | $ |
Non current assets | ||
Tangible assets | 480,000 | 110,000 |
Investments: Apple PLC | 220,000 | |
Current assets | ||
Inventories | 219,600 | 75,600 |
Trade receivables | 290,400 | 140,700 |
Cash and cash equivalents | 60,000 | 75,450 |
Total Assets | 1,270,000 | 401,750 |
Equity and liabilities | ||
Share capital :Ordinary $1 shares | 750,000 | 150,000 |
Share premium | - | 18,750 |
Retained earnings | 96,000 | 80,000 |
Non- current liabilities: | ||
Loan | 79,000 | 60,000 |
Current liabilities | ||
Trade and other payables | 345,000 | 93,000 |
Total Equity & Liabilities | 1,270,000 | 401,750 |
Additional information:
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Blueberry PLC acquired 120,000 shares in Apple PLC on 1st Jan 2020 for a cost of $ 220,000 when the retained earnings of Apple PLC were $ 30,000. The fair value of the non-controlling interest in Apple PLC at the date of acquisition was $43,500.
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At the date of acquisition, the fair value of the net assets of Apple PLC approximated their carrying amounts, except for a plot of land owned by Apple PLC. This land was held in the financial statements of Apple PLC at its cost of $45,000 but was estimated to have a fair value of $90,000. This land is still owned by Apple PLC at 31st December 2020.
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On 31st December 2020 Apple PLC sold goods to Blueberry PLC for $ 15,000 at a margin of 20%. One Quarter of these goods were still unsold by Blueberry PLC at the end of the year.
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At 31st December 2020 Apple PLC s trade receivables include $ 84,000 due from Blueberry PLC and Blueberry PLCs trade payable include $ 84,000 due to Apple PLC.
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