If there are no other balances within the group, what is the value of net current assets in Pot's consolidated statement of financial position. The finance cost recognized in BJS's income statement for the year ended 31 August 20X6 in respect of the loan stock was $6,000. The fair value of Costello's noncontrolling interest was $6.5 million at the acquisition date.
Calculate Abbott's consolidated retained earnings balance as of 31 December 20X8. a) Tea owns 75% of Cup's ordinary share capital. Explain what adjustment is required to the consolidated gross profit for the intercompany sales for the year ended 31 December 20W9. There were no unpaid dividends to minority shareholders at the beginning or end of the year.
20 million $1 shares of Spender issued when the market value of the shares was. the acquired subsidiary had a net bank overdraft of USD 10 million on the acquisition date. Explain how the investments in Textures & Pills Joint Venture and Eurohelp will be included in the consolidated financial statements of Textures and prepare accordingly. extract from the consolidated statement of the company's financial position as of 30.5 marks) (b) Calculate the financing costs for the preference shares for each of the 5 years.
Section B
BE appoints one of CF's directors and has been able to significantly influence CF's activities since the takeover. The instrument is redeemable at a premium on 30 June 20X8; the valid effective interest rate during the duration of the instrument is 8%. AD received and recorded the full annual amount of interest in June 20X5 and June 20X6 and the corresponding finance charge was recognized in the financial year ended 30 June 20X5.
However, no finance costs have yet been calculated or recognized in respect of the financial year ended 30 June 20X6. BE supplies goods to CF. BE's profit margin on the sales price of these goods is 30%. BE's receivables at year end include $5,000 in respect of this intra-group balance. a) Explain the accounting treatment in the statement of financial position and income statement for the financial asset and other current assets required by IAS 39 Financial.
The income statements of Rag, Tag and Bobtail for the year ended 31 March 20X9 are given below.
Notes to the income statements
EXAM PREPARATION Question 23. AX, a publicly traded entity, plans to acquire several smaller entities. The following is an extract from Holmes' consolidated financial statements for the year ended 30 September 20X9. No other entries had been made in the revaluation reserve prior to the sale of the property.
The draft income statements for the four entities for the year ended 31 March 20X7 are as follows:. For the purposes of this question, it is not necessary to make adjustments to income tax. She has recently received the BZJ Group's annual report for the financial year ended 31 December 20X5.
Extracts from the consolidated financial statements of the group for the year ended 30 April 20X7 are given below. In your capacity as Chief Accountant of Spreader:. a) prepare a report for the board of the company analyzing the results of the group for the year ended 30 April 20X7; (21 marks) (b) explain why the segmental data included in the extracts may have to. As a result of the interview, you have identified two significant areas for investigation in respect of TYD's financial statements for the year ended 30 September 20X6.
Revenue for the period includes a sale of inventory at cost to HPS, a banking institution, for $85,000, which took place on 30 September 20X6. TYD: Statement of changes in equity for the year ended 30 September 20X6 Share capital Retained earnings Total. DPC will pay $1 million of its cash resources and increase its existing long-term borrowings for the balance.
DPC will pay $3 million of its cash resources and increase its existing long-term borrowings for balance sheets. The projected summary statements of income for the financial year 20X8 and the projected summary statement of financial position at 31 December 20X8 are presented below. No shares will be issued during 20X8. a) Prepare the draft projected financial statements for the DPC group for the year ended 31 December 20X8 under each of the following assumptions.
You have produced the one-page summary of key data, given below, together with comparative information for ABC itself, based on its financial statements for the year ended 31 March 20X6.
Section A
The adjustment to gross profit is the movement in the provision for unrealized profit between the beginning and end of the year. The summary statement of financial position for the group at 31 December 20X0 would be as follows: a) Dividends paid to non-controlling interests are:. This will be included as an outflow under the heading "cash flows from investing activities". c) The purchase of long-term assets is as follows:
The treatment in the consolidated accounts depends on whether the joint venture form is that the venture includes: These amounts will be classified according to the nature of assets and liabilities. In the investors' individual financial statements, the amounts contributed to the joint venture will be presented as an investment.
In the consolidated financial statements, the interest in the joint venture will be consolidated proportionately, regardless of the actual amounts invested by each investor. a) The objective of IFRS 3 is to ensure that when one entity is acquired by another, all assets and liabilities that existed in the acquired entity at the acquisition date are recorded at fair values that reflect their condition at that date. This hedged item is PVT but only the effective part of the hedge can be offset in the income statement. In the income statement, the finance charge should be calculated as the effective rate applied to the carrying amount of the instrument.
Subject: Determining the economic substance of a transaction Date: 25 November 20X8. a) The essence of a transaction is determined by its possible effect on the assets and liabilities of the economic entity. Income is aggregated on the statement of financial position page, usually in a box format. The cost of interest, administration and bad debts incurred by S must be disclosed in the income statement.
The loan is a monetary liability in Ant's statement of financial position and IAS 21 - Effects of changes in foreign exchange rates - requires monetary items to be translated at the exchange rate valid at the end of the year. Presentation – requires that such instruments be classified into two components in the issuer's statement of financial position. This means that the final unrecognized actuarial losses are at the end of the year. a).
The depreciation of current costs is the value of the consumption of fixed assets that took place during the year.
Section B Solutions
Even when such disclosures are audited, the scope of the audit may be relatively limited, and its scope may not be clearly defined in the voluntary report. The non-Rag portion of Bobtail's results will automatically be excluded as part of Tag's 25% non-controlling interest in profits. This will leave the Rag group with a 30% share (75% 40%) of Bobtail's results in accordance with the indirect ownership interest.
Part of the equity capital includes the bond holder's right to claim a share of the issuer's equity capital. The appropriate accounting treatment is to determine the fair value of the liability element and recognize it as part of the liability. The remaining difference between the proceeds of the instrument and the fair value of the liability must be recognized as part of equity.
The form of the convertible bond is that of a liability, but essentially the instrument contains elements of both debt and equity, and both must be recognised. A particularly important function of the statement is that it shows how the entity has accumulated cash and how that cash has been used. Margins may have been negatively impacted by additional depreciation charges arising due to the increase in long-term assets.
The amount of interest payable has increased by over $500,000 during the year, due to the large increase in borrowings intended, according to the chairman's statement, to finance the growth of the business. However, a closer look at the financial statements shows that the increase is all in the statement of financial position items, particularly inventories, trade and other payables, and long-term assets. The principle in question in the case of the first transaction is that of "substance over form".
The income statement and balance sheet have been adjusted to reflect the impact of the adjustments; However, there are many other valid ways to record the adjustments, for example using journal entries, which can be faster under exam conditions. From a very quick examination of the financial statements, it is clear that TYD is very goal-oriented. The gearing ratio if PPS were to be acquired as an associate would deteriorate due to the additional loans of $2.5 million required to acquire the shareholding.
However, it is pertinent to note that the income tax rate in Zeelandia is significantly higher than that of the other countries, and this effect negates some of its benefits.
