Consolidated SOPL

Question 1

W acquired 80% of C on 1/1/18. At d.o.a C had a building which FV $22m and CA of $20m. The remaining U.L of building 20 yrs.

C’s profit FTY to 30/6/18 was $1.6m which accrued evenly t/out TY.
W measures NCI at FV. At 30/6/18 it estimated that goodwill in C was impaired by $500,000.

What is the total C.I attributable to NCI at 30/6/18?

Answer 1

Profit to 30/6/18 - $1.6m x 6/12 = $800,000
(1/1 to 30/6)
Add. depreciation on FVA
(22-20)/20 x 6/12 = ($50,000)
GW Impairment - ($500,000)

Profit = 800-50-500 = 250,000
NCI share 20% = 50,000

Question 2

B acquired 60% of P on 1/3/19. In 09/19 B sold $46k worth of goods to P. B applies 30% markup to sales. 25% of goods still held in inv. by P at TYE.

Draft p/l
Revenue = 955 / 421.5
COS = 407.3 / 214.6
GP = 547.7 / 206.9

What will be shown as GP in the consolidated P/L of B at YE 31/12/19?

Answer 2

B’s profit - $955,000
P’s profit - 206.9 x 10/12 (from D.O.A) = $172,417
Unrealised profit - 46k x 30/130 x 25% = ($2654)

=955+172.417-2654 = 717,463

Question 3

P purchased 75% of equity share capital of S on 30/4/14. NCI are measured at FV.

The COS of both companies for YE 30/4/16:-
$60,000/$100,000

S had machinery included in its net assets at acquisition with a CA $120,000 but a FV of $200,000. The machinery had a remaining UL of 8 years at D.O.A. All depr is charged to COS

During the year, S sold some goods to P for $32k at margin of 25%. 3/4 quarters of these goods remained in inventory at year end.

What is the COS in P’s consolidated SOPL for YE 30/4/16?

Answer 3

P's COS - $60,000
S's COS - $100,000
Add. depreciation (200-120)/8 - $10,000
URP ($32k x 25%) - $8,000 x 3/4 = $6,000
Less: Intragroup sales - ($32,000)

=60k + 100k + 10k + 6k - 32k = $144,000

Question 4

On 1/1/13, W acquired all of B’s 100,000 $1 shares for $300,000. The GW acquired in the business combination was $40,000 of which 50% had been written off as impaired by 31/12/15.

on 31/12/15, W sold all of B’s shares for $450k when B had retained earnings of $185k.

What is the profit on disposal that shd be included in SOFP of W?

Answer 4

sale proceeds - $450k
share capital - $100k
R.E - $185k
GW - $20k 
= 450k - (100+185+20) = $145k