Multiple transactions and the calculation of non-controlling interest.

Comprehensive exercise 14.18 (Multiple transactions and the calculation of non-controlling interest)

On1July20X1,BudLtdacquired75%ofthesharecapitalofWeiserLtd.Theshareholders’equityofWeiser Ltd was asfollows:

$

Sharecapital                                                       150000

Retainedearnings                                                   8000

Atthedateofacquisition,allassetswerestatedattheirfairvalue.Thefollowingarethe�nancialstatements of Bud Ltd and Weiser Ltd as at 30 June20X3.

 

 

Financial Statements for the year ended 30 June 20X3

 

 

Sales

BudLtd

$

440000

WeiserLtd

$

220000

Cost of sales 200000 108 000
Gross pro� t 240000 112 000
Dividends from Weiser Ltd

Interest from Bud Ltd

7 125 —

—

 

1 000

  247125 113000_
Marketing expenses 53 000 26 000
Administration expenses 56 425 25 000
Finance expenses 7500    3 000
Total operating expenses 116925  54 000
Operating pro� t before tax 130 200 59 000
Income tax expense 59500  24 000
Operating pro� t after tax 70 700 35 000
Retained earnings 1 July 20X2 24000  19 000
   94 700  54 000
Interim dividend 8 000 9 500
Proposed dividend  45 000  22 500
   53 000  32 000

 

476                            CORPORATE ACCOUNTING INAUSTRALIA

 

 

 

 

 

Retained earnings 30 June 20X3

BudLtd

$

41700

WeiserLtd

$

22000

 
Share capital 300 000 150 000  
General reserve

10% unsecured notes Dividend payable

38 000

50 000 —

45 000

10000

 

22500

 
Current tax liability 60 000 24 000  
Other current liabilities  59 600  38 900  
  594 300 267400_  
Shares in Weiser Ltd 126 000 —    
10% unsecured notes (in Bud Ltd) — 10 000  
Other non-current assets 325 600 180 000  
Inventory 32 000 22 000  
Other current assets 110 700  55 400  
  594 300 267400_  
     
 

Additional information:

     
(a)    Intragroup saleswere: Bud Ltd to WeiserLtd  

$15 000

   
Weiser Ltd to Bud Ltd $35 000    

 

(b)    Unrealised pro� ts in closing inventorywere:  
  Y/E 30/06/20X2 Y/E 30/06/20X3
  $ $
Goods sold by Weiser Ltd to Bud Ltd 2000 2500
Goods sold by Bud Ltd to Weiser Ltd — 1000
  • Thedirectorshaveappliedtheimpairmenttestforgoodwillannuallyanddeterminedthatawrite- down of $1500 is required for consolidation purposes as at 30 June 20X3. The cumulative goodwill impairment write-downs for prior years totalled$1500.
  • The tax rate is30%.

Required

Prepare the consolidated statement of comprehensive income and statement of � nancial position for the economic entity at 30 June 20X3, showing a consolidated worksheet and all calculations.

 

 

 

 

 

 

 

 

 

 

 

AssignmentQuestions

 

UsingtheinformationprovidedinComprehensiveExercise14.18inthetextbook,prepare answers for the following parts, showing all relevant calculations andworkings.

 

 

  1. Show all consolidation journal entries necessary for the preparation of the consolidated financialstatementsforBudLtdanditssubsidiaryfortheyearended30June20x3,using the partial goodwillmethod.

 

 

  1. Show the NCI calculations, and prepare the consolidated statements of comprehensive income and financial position for the economic entity at 30 June20x3.
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