V. a percentage share of the net assets acquired. + The directors reviewed goodwill at 31 March 2020 and estimated an impairment of 10,000.- None of the companies had made any share issues during the year. VI + Required: a) Prepare the consolidated balance sheet for the Pagoda group for the year ended 31 March 2020 in accordance with international financial reporting standards. [17 marks] b) Analyse the entries required in the consolidated statement of profit or loss for the Pagoda group as a result of note iii above. [4 marks] c) Discuss the treatment of goodwill on acquisition of Scenic plc in the consolidated accounts and explain how that goodwill should be valued in subsequent years. [4 marks] Total 25 marks- + tttttt Version 1 Notes: 1 At acquisition, the retained earnings of Scenic plc and Aspect plc were 100,000 and 425,000 respectively. At 30 June 2019, the fair value of a piece of land owned by Scenic exceeded the carrying amount by 60,000. Scenic still owns this land at the year end. - During January and February 2020, Pagoda sold goods on credit to Scenic for a total of 220,000. Half these goods remained unsold in Scenic's warehouse at 31 March 2020. Pagoda's normal profit margin is 20%. The goods have not been paid for at 31 March 2020. + It is the group policy to measure non-controlling interests at acquisition as a percentage share of the net assets acquired. The directors reviewed goodwill at 31 March 2020 and estimated an impairment of 10,000.- None of the companies had made any share issues during the year iv. + V. VI. Required- a) Prepare the consolidated balance sheet for the Pagoda group for the year ended 31 March 2020 in accordance with international financial reporting standards. [17 marks] b) Analyse the entries required in the consolidated statement of profit or loss for the Pagoda group as a result of note iii above. [4 marks] A2A-1 # Cash 2,000 + 2,260,800- 25,000- + 1,078,200- 30,000 875,500 Equity and liabilities Equity- Share capital (1 ordinary shares) Retained earnings: 1,200,000- 700,000- 1,900,000+ 600,000+ 200,000- 800,000- 500,000- 375,000- 875,000-2 Non-current liabilities: 200,000- 100,000- Current liabilitiese 160,800- 2,260,800- 178,200- 1,078,200- 500++ 875,500-2 at - Question 2 - Pagoda plc is travel company, providing luxury camping holidays and camping equipment. The directors plan to increase the market share of the business by acquiring other companies and on 30 June 2019 Pagoda acquired 80% of the ordinary share capital of Scenic plc. Three months later, on 30 September 2019 it acquired 25% of Aspect plc. The balance sheets of all three companies at 31 March 2020 are as follows: + Balance Sheets Scenic Pagoda- f Aspect- + 627,700- Non-current assetse Property, plant & equipment- Investment in Scenice Investment in Aspecto 360,400-2 + 780,800- 620,000- 100,000.- 1,500,800- ++ 2 627,700- 360,400 Current assets Inventories: Receivables: Cash 258,000- 500,000 2,000- 2.260,800- 362,000- 63,500- 25,000.- 1,078, 2002 420,000-2 65,100- 30,000++ 875,500++ Equity and liabilities V. a percentage share of the net assets acquired. + The directors reviewed goodwill at 31 March 2020 and estimated an impairment of 10,000.- None of the companies had made any share issues during the year. VI + Required: a) Prepare the consolidated balance sheet for the Pagoda group for the year ended 31 March 2020 in accordance with international financial reporting standards. [17 marks] b) Analyse the entries required in the consolidated statement of profit or loss for the Pagoda group as a result of note iii above. [4 marks] c) Discuss the treatment of goodwill on acquisition of Scenic plc in the consolidated accounts and explain how that goodwill should be valued in subsequent years. [4 marks] Total 25 marks- + tttttt Version 1 Notes: 1 At acquisition, the retained earnings of Scenic plc and Aspect plc were 100,000 and 425,000 respectively. At 30 June 2019, the fair value of a piece of land owned by Scenic exceeded the carrying amount by 60,000. Scenic still owns this land at the year end. - During January and February 2020, Pagoda sold goods on credit to Scenic for a total of 220,000. Half these goods remained unsold in Scenic's warehouse at 31 March 2020. Pagoda's normal profit margin is 20%. The goods have not been paid for at 31 March 2020. + It is the group policy to measure non-controlling interests at acquisition as a percentage share of the net assets acquired. The directors reviewed goodwill at 31 March 2020 and estimated an impairment of 10,000.- None of the companies had made any share issues during the year iv. + V. VI. Required- a) Prepare the consolidated balance sheet for the Pagoda group for the year ended 31 March 2020 in accordance with international financial reporting standards. [17 marks] b) Analyse the entries required in the consolidated statement of profit or loss for the Pagoda group as a result of note iii above. [4 marks] A2A-1 # Cash 2,000 + 2,260,800- 25,000- + 1,078,200- 30,000 875,500 Equity and liabilities Equity- Share capital (1 ordinary shares) Retained earnings: 1,200,000- 700,000- 1,900,000+ 600,000+ 200,000- 800,000- 500,000- 375,000- 875,000-2 Non-current liabilities: 200,000- 100,000- Current liabilitiese 160,800- 2,260,800- 178,200- 1,078,200- 500++ 875,500-2 at - Question 2 - Pagoda plc is travel company, providing luxury camping holidays and camping equipment. The directors plan to increase the market share of the business by acquiring other companies and on 30 June 2019 Pagoda acquired 80% of the ordinary share capital of Scenic plc. Three months later, on 30 September 2019 it acquired 25% of Aspect plc. The balance sheets of all three companies at 31 March 2020 are as follows: + Balance Sheets Scenic Pagoda- f Aspect- + 627,700- Non-current assetse Property, plant & equipment- Investment in Scenice Investment in Aspecto 360,400-2 + 780,800- 620,000- 100,000.- 1,500,800- ++ 2 627,700- 360,400 Current assets Inventories: Receivables: Cash 258,000- 500,000 2,000- 2.260,800- 362,000- 63,500- 25,000.- 1,078, 2002 420,000-2 65,100- 30,000++ 875,500++ Equity and liabilities