The statement of financial position (balance sheet) of Herbert Ltd (H Ltd) and Selina Ltd (S...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The statement of financial position (balance sheet) of Herbert Ltd (H Ltd) and Selina Ltd (S Ltd) as at 31 December 2017 are as shown below: H Ltd S Ltd *000 *000 Tangible fixed assets Land and building 20,000 6,000 Plant and machinery 16,500 4,400 36,500 10,400 Investment in S Ltd 16,800 Current assets Inventory 1,200 Trade receivables 600 3,900 Current account with S Ltd Cash 7,200 12.900 Current liabilities Trade payables (12,600) Current account with H Ltd Dividends payable (3,000) (2,700) 600 Total net assets 50,600 11,000 Share capital 30,000 6.000 (30,000,000 and 6,000,000 shares issued and fully paid) Retained earnings 20,600 5.000 Total equity 50,600 11,000 H Ltd acquired 70% of the share capital of S Ltd on 1 January 2015 by an exchange of one share in H Ltd. plus $1 for every share in S Ltd. when the retained earnings of S Ltd were $1,800,000. The market price of each of H's share and S's share at the date of acquisition were $3 and $2 respectively. On 31 December 2017, S Ltd sent a cheque to H Ltd for $600,000 and also goods in transit of $900,000. Both cash and goods were not received by H Ltd until 1 January 2018. H Ltd has not included any entries in its accounts relating to the dividend receivable from S Ltd. Forty percent of the goodwill is to be written off as an impairment loss in 2017 (Hint: Dr. Retained earnings and Cr. Goodwill) Required 1 Prepare the consolidation journal entries for the H & S Ltd. Use fair value approach to assess NCI. 2 Prepare a consolidated Statement of the financial position (balance sheet) for H Ltd as at 31 December 2017 showing the adjustment by using a worksheet. 600 300 4,500 5,400 (1,200) (2,400) (1,200) The statement of financial position (balance sheet) of Herbert Ltd (H Ltd) and Selina Ltd (S Ltd) as at 31 December 2017 are as shown below: H Ltd S Ltd *000 *000 Tangible fixed assets Land and building 20,000 6,000 Plant and machinery 16,500 4,400 36,500 10,400 Investment in S Ltd 16,800 Current assets Inventory 1,200 Trade receivables 600 3,900 Current account with S Ltd Cash 7,200 12.900 Current liabilities Trade payables (12,600) Current account with H Ltd Dividends payable (3,000) (2,700) 600 Total net assets 50,600 11,000 Share capital 30,000 6.000 (30,000,000 and 6,000,000 shares issued and fully paid) Retained earnings 20,600 5.000 Total equity 50,600 11,000 H Ltd acquired 70% of the share capital of S Ltd on 1 January 2015 by an exchange of one share in H Ltd. plus $1 for every share in S Ltd. when the retained earnings of S Ltd were $1,800,000. The market price of each of H's share and S's share at the date of acquisition were $3 and $2 respectively. On 31 December 2017, S Ltd sent a cheque to H Ltd for $600,000 and also goods in transit of $900,000. Both cash and goods were not received by H Ltd until 1 January 2018. H Ltd has not included any entries in its accounts relating to the dividend receivable from S Ltd. Forty percent of the goodwill is to be written off as an impairment loss in 2017 (Hint: Dr. Retained earnings and Cr. Goodwill) Required 1 Prepare the consolidation journal entries for the H & S Ltd. Use fair value approach to assess NCI. 2 Prepare a consolidated Statement of the financial position (balance sheet) for H Ltd as at 31 December 2017 showing the adjustment by using a worksheet. 600 300 4,500 5,400 (1,200) (2,400) (1,200)
Expert Answer:
Answer rating: 100% (QA)
Any ii Journal Entry Land AIC Goodwich Ace Building Plan... View the full answer
Related Book For
International Financial Reporting A Practical Guide
ISBN: 978-1292200743
6th edition
Authors: Alan Melville
Posted Date:
Students also viewed these accounting questions
-
Old Office Building Karas Investments owns a small office building in Windhoek, from which the company operates. The Windhoek office was purchased on 1 March 2019. Karas Investments decided to move...
-
On 30 June 2019 Tip Ltd acquired 100 per cent of the issued capital of Top Ltd for $4 000 000. At that date, the statement of financial position of Top Ltd showed share capital and reserves of: Share...
-
Prepare the Statement of Cashflow using the INDIRECT METHOD as at 29 February 2021. Show all the necessary workings. Statement of Comprehensive Income for the year ended 28 February 2021 R Revenue...
-
Please watch the video link and answer the following questions. https://youtu.be/VtvjbmoDx-I On January 22,1984, Apple produced one of the most famous Super Bowl ads of all time. Directed by Ridley...
-
What account(s) is(are) used to eliminate overapplied or underapplied overhead from the Factory Overhead account, assuming the amount is not material?
-
What is a sample statistic? Give three examples.
-
Define audit planning memorandum. What can one expect to find in an audit programme?
-
In many situations, a seller of an item entertains bids from a number of buyers but allows one buyer to obtain the good by matching the highest competing offer. Consider the owner of a house who must...
-
Twenty years ago there was little in the way of electronic funds transfers and payments. Discuss the impact of things like just-in-time inventory systems and point of sales systems on the need for...
-
Quack Concepts produces its patented drug Metafour (a duck extract used as an antioxidant) in both Hong Kong and the United States. The effective marginal tax rate is 35 percent in the United States...
-
Refrigerant 22 undergoes a constant-pressure process within a pistoncylinder assembly from saturated vapor at 4 bar to a final temperature of 30 oC. Kinetic and potential energy effects are...
-
Discuss the advantages and possible dangers of conducting compliance and substantive tests simultaneously using the same sample of items.
-
How does activity-based costing differ from the traditional approach? What is the underlying difference in the philosophy of each of them?
-
Should the auditor have a statutory right to demand responses to confirmation requests?
-
What are the four main areas on which the balanced scorecard is based?
-
Executives in the multibillion-dollar toy industry constantly search for the next big hit, a magical toy that will trigger a nationwide frenzy among youngsters comparable to the mania sparked in...
-
In a contract made by a minor, _____.
-
The Home Depot is the leading retailer in the home improvement industry and one of the 10largest retailers in the United States. The company included the following on its January 29, 2012, balance...
-
E plc has an issued share capital consisting of 800,000 ordinary shares. There are no preference shares. Some years ago, the company issued 1 million of 10% convertible loan stock, convertible in...
-
You have been asked to help prepare the financial statements of Tanhosier Ltd for the year ended 31 March 2018. A trial balance as at 31 March 2018 is shown below. The following further information...
-
IAS36 Impairment of Assets was issued in June 1998 and subsequently revised in March 2004 and January 2008. Its main objective is to prescribe the procedures that should ensure that an entity's...
-
Economic order quantity; tabular computation Edgar Chemical, Inc., requires 20,000 gals. of material annually, where the cost of placing an order is $20 and the annual carrying cost per unit is $5....
-
Journalizing materials transactions Dino's Specialty Clothing Inc. uses a job order cost system. A partial list of the accounts being maintained by the company, with their balances as of November 1,...
-
Inventory costing methods The following transactions affecting materials occurred in February: Feb. 1 Balance on hand, 1,200 feet @ $2.76, $3,312.00 (plastic tubing, stores ledger account #906). 5...
Study smarter with the SolutionInn App