financial accounting reportinfg
Question 1
Ping acquired its investment in Pong on 1.7.X7 (retained earnings $6,000). The agreed consideration is $30,000 cash and a further $10,000 on 1.7.X9. Ping’s cost of capital is 7%. Pong has an internally developed brand “Pongo” which was valued at $5,000 @ acquisition. There are no changes in share capital or revaluation reserve of Pong Co since that date. At 30.6.X8 Pong invoiced Ping for goods to the value of $2,000 and Ping had sent full payment but has not been received by Pong.
There is no impairment of goodwill. It is group policy to value non-controlling interest at full fair value. At the acquisition date the non-controlling interest was valued at $9,000.
Prepare the consolidated statement of financial position of Ping @ 30.6.X8.
Statement of Financial Position @ 30.6.X8:
Ping Co $
Pong Co $
ASSETS
Non-current assets
Property, plant & equipment
20,000 ordinary shares in Pong at cost
Current assets
Inventory
Owed by Ping Co
Receivables
Cash
50,000
30,000
3,000
16,000
2,000
40,000
8,000
10,000
7,000
-
Total Assets
101,000
65,000
EQUITY AND LIABILITIES
Equity
Ordinary shares @ $1
Revaluation surplus
Retained earnings
Current liabilities
Owed to Pong Co
Trade payables
45,000
12,000
26,000
8,000
10,000
25,000
5,000
28,000
-
7,000
Total equity and liabilities
101,000
65,000
Question 2
Below are the SOFP of H Co and P Co @ 31.12.20X8:
P Co (RM)
S Co (RM)
Ordinary shares
Parent
NCI
400,000
200,000
100,000
Preference shares
Parent
NCI
75,000
25,000
Share Premium
50,000
60,000
Retained Earnings
Pre acquisition
Post acquisition
50,000
30,000
15,000
8% Debentures
Parent
NCI
20,000
80,000
Other Liabilities
20,000
15,000
TOTAL EQUITY AND LIABILITIES
520,000
620,000
Sundry assets
135,000
620,000
Investments – ordinary shares S Co
Investments – preference shares S Co
Investments – 8% debentures S Co
290,000
Ping acquired its investment in Pong on 1.7.X7 (retained earnings $6,000). The agreed consideration is $30,000 cash and a further $10,000 on 1.7.X9. Ping’s cost of capital is 7%. Pong has an internally developed brand “Pongo” which was valued at $5,000 @ acquisition. There are no changes in share capital or revaluation reserve of Pong Co since that date. At 30.6.X8 Pong invoiced Ping for goods to the value of $2,000 and Ping had sent full payment but has not been received by Pong.
There is no impairment of goodwill. It is group policy to value non-controlling interest at full fair value. At the acquisition date the non-controlling interest was valued at $9,000.
Prepare the consolidated statement of financial position of Ping @ 30.6.X8.
Statement of Financial Position @ 30.6.X8:
Ping Co $
Pong Co $
ASSETS
Non-current assets
Property, plant & equipment
20,000 ordinary shares in Pong at cost
Current assets
Inventory
Owed by Ping Co
Receivables
Cash
50,000
30,000
3,000
16,000
2,000
40,000
8,000
10,000
7,000
-
Total Assets
101,000
65,000
EQUITY AND LIABILITIES
Equity
Ordinary shares @ $1
Revaluation surplus
Retained earnings
Current liabilities
Owed to Pong Co
Trade payables
45,000
12,000
26,000
8,000
10,000
25,000
5,000
28,000
-
7,000
Total equity and liabilities
101,000
65,000
Question 2
Below are the SOFP of H Co and P Co @ 31.12.20X8:
P Co (RM)
S Co (RM)
Ordinary shares
Parent
NCI
400,000
200,000
100,000
Preference shares
Parent
NCI
75,000
25,000
Share Premium
50,000
60,000
Retained Earnings
Pre acquisition
Post acquisition
50,000
30,000
15,000
8% Debentures
Parent
NCI
20,000
80,000
Other Liabilities
20,000
15,000
TOTAL EQUITY AND LIABILITIES
520,000
620,000
Sundry assets
135,000
620,000
Investments – ordinary shares S Co
Investments – preference shares S Co
Investments – 8% debentures S Co
290,000