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Consolidation (Study Hub)

Patronic Co has prepared a consolidated statement of financial position and profit/loss statement. The consolidated statements include Patronic Co's subsidiaries Storm Co and S.co. Key details include: - Storm Co was acquired during the year for a cost of Rs. 12,250. Its net assets at acquisition were Rs. 11,000. - S.co's net assets increased from Rs. 10,400 at acquisition to Rs. 11,2400 at the end of the reporting period. It contributed post-acquisition profits of Rs. 6,400 to the consolidated profit. - Patronic Co's investment in Acerbic Co should be treated as a financial asset rather than an associate, as

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568 views4 pages

Consolidation (Study Hub)

Patronic Co has prepared a consolidated statement of financial position and profit/loss statement. The consolidated statements include Patronic Co's subsidiaries Storm Co and S.co. Key details include: - Storm Co was acquired during the year for a cost of Rs. 12,250. Its net assets at acquisition were Rs. 11,000. - S.co's net assets increased from Rs. 10,400 at acquisition to Rs. 11,2400 at the end of the reporting period. It contributed post-acquisition profits of Rs. 6,400 to the consolidated profit. - Patronic Co's investment in Acerbic Co should be treated as a financial asset rather than an associate, as

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Hammad
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(working area)

Consolidated statement of financial position as at 30 Sep 20X7 for petrel Co


cost of investment of Storm Co
ASSETS
Share cons 9000
Non-current assets Cash consi 3750
less : professiona -500
Property plant & equ 28400
Investment in Auk Co 10500 Cost of in 12250
Financial asset inves 9000
Goodwill 4500 Net assets of Storm Co
internally generated 1000
Current assets at acquisit at reportin

inventory 12800 ordinary sh 4000 4000


trade recievables 4700 retained e 6000 8900
internally 1000 1000
TOTAL ASSETS 70900 excess depreciation 100
URP on inventory -300
EQUITY AND LIABILITIES
TOTAL 11000 13700
Ordinary share capita 11500
retained earnings 30275
share premium 7500 Intra-group sale (fixed asset)
NCI 3425 (P-S)

TOTAL EQUITY 52700 Fair value 2500


carrying a 2000
LIABILTIES
URP 500
Non-current liabilties

7% loans 6000 depreciatio 400


depreciatio 500
Current liabilities 12200 depreciatio 100

TOTAL EQUITY AND LIABILITIES 70900

check 0
Goodwill

Cost of in 12750 15500

S.co fv of -8250

Goodwill 4500

NCI

Post acquisition S.co net as 2750


S.co post a 675
0
2900 NCI for SO 3425
0
100 Consolidated reserves
-300
P.co retain 25250
2700 S.co post a 2025

add: increase in 2500


URP -500
A.Co profit 1500
Professiona -500
Consolidat 30275
Carrying value of investment in associates

Cost of in 9000
A.co post 1500

carrying va 10500
Consolidated statement of profit/loss and other comprehensive income for the year ended 31 march 20X6 for patronic Co

Revenue 192000 Cost of investment


Cost of sales -119100
Share cons 69000
gross profit 72900 Deferred c 36000
distribution cost -9400
administrative expen -18500 cost of in 105000
finance cost -5000
Unwinding 2400
profit before tax 40000
income tax expenses -12800 Net assets Of S.co

share of profit of asso 1800 at acquisit at reporting date

Ordinary sh 24000 24000


profit for the period 29000 retained e 73500 82500
FVA of pro 4100 3900
FVA of plan 2400 2000

S.co Profit after tax f 9000 TOTAL 104000 112400


adjustments
Intra-group sales
Excess depreciation o -400
Excess depreciation o -200 total intra 10000
Goodwill impairment -2000
Inventory 3000
adjusted profits 6400 URP 500

Profit attributable to 27400


NCI 1600
total consolidated pro 29000

(b)

when preparing the consolidated financial statements Patronic Co should treat this investment in acerbic Co as a financial asse
as Patronic Co had no more significant influence in Acerbic Co
march 20X6 for patronic Co

n acerbic Co as a financial asset ( equity instrument)

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