Question
Financial statements of Equuleus Ltd and its subsidiary Fornax Ltd at 31 Dec 2014: Equuleus Ltd Fornax Ltd Profit before tax $ 3200 $ 1800
Financial statements of Equuleus Ltd and its subsidiary Fornax Ltd at 31 Dec 2014:
Equuleus Ltd | Fornax Ltd | ||||||||||||||||||
Profit before tax | $ 3200 | $ 1800 | |||||||||||||||||
Income tax expense | (1300) | (240) | |||||||||||||||||
Profit for the year Other comprehensive income: Gain/loss on FA fair value change Total comprehensive income Profit for the year | 1900 (500) 1400 | 1560 200 1360 | |||||||||||||||||
1900 | 1560 | ||||||||||||||||||
Retained earnings (1/1/2014) | 1500 | 2100 | |||||||||||||||||
3400 | 3660 | ||||||||||||||||||
Dividend | (500) | (0) | |||||||||||||||||
Retained earnings (31/12/2014) | 2900 | 3660 | |||||||||||||||||
Share capital | 25000 | 10000 | |||||||||||||||||
General reserve | 8000 | 3000 | |||||||||||||||||
FA fair value change reserve (1/1/2014) | 1500 | 300 | |||||||||||||||||
Change during the year (simultaneously as OCI) | (500) | 200 | |||||||||||||||||
FA fair value change reserve (31/12/2014) | 1000 | 500 | |||||||||||||||||
Liabilities (include DTL net of DTA) | 5000 | 1300 | |||||||||||||||||
Total equity and liabilities | $ 41900 | $ 18460 | |||||||||||||||||
Land | $ 8600 | $ 5100 | |||||||||||||||||
Plant | 17000 | 8000 | |||||||||||||||||
Accumulated depreciation | (5000) | (1000) | |||||||||||||||||
Financial assets | 3000 | 2000 | |||||||||||||||||
Inventory | 3000 | 4000 | |||||||||||||||||
Cash | 300 | 360 | |||||||||||||||||
Shares in Fornax Ltd | 15000 | - | |||||||||||||||||
Total Assets | $ 41900 | $ 18460 | |||||||||||||||||
Equuleus Ltd had acquired all the share capital of Fornax Ltd on 1 Jan 2013 for $15000 when the equity of Fornax Ltd consisted of:
At the acquisition date, Fornax’s assets and liabilities were recorded as fair value except for the following:
The plant had a further 5-year life. The inventory was sold by 31 Dec 2013. All valuation adjustments to non-current assets are made on consolidation. The land was sold in May 2014 for $6000. Tax rate is 30%. Required Prepare the consolidated financial statements for the year ended 31 Dec 2014. Include consolidation adjustment journal entries and a consolidation worksheet. |
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At 1 Jan 2013 Particulars Amount Net fair value of identifiable assets and liabilities of Fornax Ltd Equity 1000020001500 13500 Land 1400 Plant 700 inventory 700 16300 Consideration transferred 15000 ...Get Instant Access to Expert-Tailored Solutions
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