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P Co acquired a controlling interest in Moonstone as follows: Interest acquired 95% Statement of Changes in Equity for the year ended 31 Dec 2013 (partial) P Co P Moonstone Moonstone Moonstone Retained Retained Revaluation Total Date of acquisition 1 January 2011 carnings earnings reserve At acquisition date, the shareholder's equity of Moonstone Co were as follows: Balance, 1 January 2013 1 700,000 650,000 185,000 835,000 Moonstone Share capital Comprehensive income 1,650,000 400,000 3,609,500 1,000,000 150,000 1,150,000 Retained earnings Revaluation reserves Dividends declared (200,000) (150,000) (150,000) 150.000 Balance, 31 December 2013 2.200.000 4.109.500 1.500.000 335.000 1.835.000 Statement of Financial Position as at 31 Dec 2013 The fair and book values of identifiable net assets of Moonstone at date of acquisition were as follows: P Co Moonstone Co 2,500,000 C---------Moonstone Co---------------> Book value Fair value 300,000 420,000 Sold by Moonstone Co during 2011 Fixed assets, net book value Investment in Moonstone Co 4,000,000 3,500,000 925,000 Inventory Inventory 700,000 250,000 650,000 550,000 Remaining useful life was 5 years Intercompany receivable Accounts receivable Intangible assets Other net assets 2.250,000 3.950,000 3.950,000 Dividend receivable from Moonstone 142,500 4.250.000 4.920,000 Cash 57,500 300,000 Fair value of Moonstone Co's non-controlling interest as at date of acquisition was $400,000 10.875.000 4.400.000 765,000 The financial statements of P Co and Moonstone Co are shown below: Accounts payable Intercompany payable 3,451,500 250,000 Dividend payable 64,000 150,000 Statement of Comprehensive Income for the year ending 31 Dec 2013 Share capital 3,000,000 1,650,000 Retained earnings 4,109,500 1,500,000 P P Co Profit before tax Moonstone Co 1,250,000 (250,000) Revaluation reserves 335.000 4,500,000 (890.500) 3.609,500 10.875.000 Tax Profit after tax Other comprehensive income: 4.400.000 1.000.000 Required Change in revaluation reserve, after- tax 150.000 Comprehensive income 3.609.500 1.150.000 (a) Calculate the amount of goodwill on the acquisition date. (6 marks) ) (6) Prepare the consolidation adjusting entries for the year ending 31 December 2013. (Be sure to separate the allocation of current revaluation reserves to non-controlling interests from the opening revaluation reserves.) Tax rate was 20%. (42 marks) (c) Calculate the NCI as at 31 December 2013. (10 marks) (d) Prepare the consolidated statement of comprehensive income for the P Group for the year ended 31 December 2013. (17 marks) (e) Prepare the consolidated statement of financial position as at 31 December 2013. Please show detailed calculation on the balance of deferred tax liability, consolidated retained earnings and consolidated revaluation reserve as at 31 December 2013. (25 marks) P Co acquired a controlling interest in Moonstone as follows: Interest acquired 95% Statement of Changes in Equity for the year ended 31 Dec 2013 (partial) P Co P Moonstone Moonstone Moonstone Retained Retained Revaluation Total Date of acquisition 1 January 2011 carnings earnings reserve At acquisition date, the shareholder's equity of Moonstone Co were as follows: Balance, 1 January 2013 1 700,000 650,000 185,000 835,000 Moonstone Share capital Comprehensive income 1,650,000 400,000 3,609,500 1,000,000 150,000 1,150,000 Retained earnings Revaluation reserves Dividends declared (200,000) (150,000) (150,000) 150.000 Balance, 31 December 2013 2.200.000 4.109.500 1.500.000 335.000 1.835.000 Statement of Financial Position as at 31 Dec 2013 The fair and book values of identifiable net assets of Moonstone at date of acquisition were as follows: P Co Moonstone Co 2,500,000 C---------Moonstone Co---------------> Book value Fair value 300,000 420,000 Sold by Moonstone Co during 2011 Fixed assets, net book value Investment in Moonstone Co 4,000,000 3,500,000 925,000 Inventory Inventory 700,000 250,000 650,000 550,000 Remaining useful life was 5 years Intercompany receivable Accounts receivable Intangible assets Other net assets 2.250,000 3.950,000 3.950,000 Dividend receivable from Moonstone 142,500 4.250.000 4.920,000 Cash 57,500 300,000 Fair value of Moonstone Co's non-controlling interest as at date of acquisition was $400,000 10.875.000 4.400.000 765,000 The financial statements of P Co and Moonstone Co are shown below: Accounts payable Intercompany payable 3,451,500 250,000 Dividend payable 64,000 150,000 Statement of Comprehensive Income for the year ending 31 Dec 2013 Share capital 3,000,000 1,650,000 Retained earnings 4,109,500 1,500,000 P P Co Profit before tax Moonstone Co 1,250,000 (250,000) Revaluation reserves 335.000 4,500,000 (890.500) 3.609,500 10.875.000 Tax Profit after tax Other comprehensive income: 4.400.000 1.000.000 Required Change in revaluation reserve, after- tax 150.000 Comprehensive income 3.609.500 1.150.000 (a) Calculate the amount of goodwill on the acquisition date. (6 marks) ) (6) Prepare the consolidation adjusting entries for the year ending 31 December 2013. (Be sure to separate the allocation of current revaluation reserves to non-controlling interests from the opening revaluation reserves.) Tax rate was 20%. (42 marks) (c) Calculate the NCI as at 31 December 2013. (10 marks) (d) Prepare the consolidated statement of comprehensive income for the P Group for the year ended 31 December 2013. (17 marks) (e) Prepare the consolidated statement of financial position as at 31 December 2013. Please show detailed calculation on the balance of deferred tax liability, consolidated retained earnings and consolidated revaluation reserve as at 31 December 2013. (25 marks)

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