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Group Accounts Solutions: Questions 1 & 2

The document provides solutions to group accounts lecture questions focusing on determining group structures and subsidiary net assets. It includes calculations for share capital, general reserves, profit and loss, and goodwill for both controlling and non-controlling interests. The consolidated balance sheets are presented with adjustments for accurate financial reporting.

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rojay burton
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98 views4 pages

Group Accounts Solutions: Questions 1 & 2

The document provides solutions to group accounts lecture questions focusing on determining group structures and subsidiary net assets. It includes calculations for share capital, general reserves, profit and loss, and goodwill for both controlling and non-controlling interests. The consolidated balance sheets are presented with adjustments for accurate financial reporting.

Uploaded by

rojay burton
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

SOLUTION TO GROUP ACCOUNTS LECTURE QUESTIONS 1 AND 2

QUESTION 1

1. Determine Group Structure

P
`
20,000
20,000
= 100%
S
Shares acquired/number of shares in subsidiary

2. Determine Subsidiary’s Net Assets


Date of Acquisition Date of Balance Sheet
March 31, 2013 March 31, 2013
Share Capital 20,000 20,000
General Reserves 5,000 5,000
Profit and Loss 10,000 10,000
35,000 35,000
===== =====

Cost of Control
Investment in Subsidiary 45,000 Share Capital 20,000
General Reserves 5,000
Profit and Loss 10,000
Goodwill 10,000
------- ---------
45,000 45,000
===== =====

1
P S Adjustments Consol B/S
Fixed Assets 18,000 27,000 45,000
Goodwill 10,000
Investment in S Ltd 45,000 -45,000
Current Assets 20,000 16,000 36,000
91,000
Creditors (17,500) (8,000) (25,500)
65,500
=====

Share Capital 30,000 20,000 -20,000 30,000


General Reserves 10,500 5,000 -5,000 10,500
Profit and Loss 25,000 10,000 -10,000 25,000
65,500
=====
QUESTION 2

1. Determine Group Structure

P
16,000
20,000
= 80%
NCI 4,000
20,000 S
= 20%

2. Determine Subsidiary’s Net Assets


Date of Acquisition Date of Balance Sheet
March 31, 2013 March 31, 2013
Share Capital 20,000 20,000
General Reserves 5,000 5,000
Profit and Loss 10,000 10,000
35,000 35,000
===== =====

2
Cost of Control
Investment in Subsidiary 45,000 Share Capital 16,000(20k*80%)
General Reserves 4,000(5k*80%)
Profit and Loss 8,000 (10k*80%)
Consol B/S: Goodwill 17,000
------- ---------
45,000 45,000
===== =====

Non-Controlling Interest
Share Capital 4,000 (20k*20%)
General Reserves 1,000 (5k*20%)
Consolidated Balance Sheet 7,000 Profit and Loss 2,000 (10k*20%)
7,000 7,000
==== ====

P S Adjustments Consol B/S


Fixed Assets 18,000 27,000 45,000
Investment in S Ltd 45,000 -45,000
Goodwill 17,000
Current Assets 20,000 16,000 36,000
98,000
Creditors (17,500) (8,000) (25,500)
72,500
=====

Share Capital 30,000 20,000 -16,000, -4,000 30,000


General Reserves 10,500 5,000 -4,000, -1,000 10,500
Profit and Loss 25,000 10,000 -8,000, -2,000 25,000
65,500
Non-Controlling Interest 7,000
72,500
=====

3
4

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