Consolidated SOFP Flashcards
Crash Co acquired 70% of Bang Co’s 100,000 $1 ordinary shares for $800,000 when the retained earnings of Bang Co were $570,000.
Bang Co also has an internally developed customer list which has been independently valued at $90,000. The non-controlling interest in Bang Co was judged to have a fair value of $220,000 at the date of acquisition.
What was the goodwill arising on acquisition?
Consideration transferred - $800,000
FV of non-controlling interest - $220,000
= $1,020,000
FV of net assets:
Shares - $100,000
Retained earnings (pre) - $570,000
=$670,000
=1020-670 = $350,000
On 1/7/15, Pull Co acquired 80% of equity of Sat Co. At the date of acquisition, goodwill was calculated as $10,000 and the NCI was measured at FV. In conducting the FV exercise on Sat Co’s net assets at acquisition, Pull Co concluded that PPE with a remaining life of 10 years had a FV of $300,000 in excess of CA. Sat co had not incorporated this FV adjustment into its individual F/S.
At reporting date of 31/12/15, the goodwill was fully impaired. For the year ended, 31/12/15 Sat Co reported a profit for the year of $200,000.
What is the Pull Group profit for the year ended 31/12/15 that is attributable to NCI?
Subsidiary profits ($200,000 x 6/12) - $100,000
(from 1/7 to 31/12)
Write of goodwill (per question, fully impaired) - ($10,000)
Additional depreciation - ($15,000)
$300,000/10 x 6/12
=$100 - $10 - $15 = $75,000
NCI at 20% - 20% x $75,000 = $15,000
On 1/6/11, P acquired 80% of equity share of capital of S. At the D.O.A the FV of S’s net assets were equal to their CA with the exception of its property. This had FV of $1.2m BELOW its CA. The property had remaining UL of 8 yrs.
What effect will any adjustment required in respect of the property have on gp R.E at 30/9/11?
($1.2m/8 x 4/12) x 80% = $40,000 reduced
