Question 4 At October 2018 Cha Ltd had an investment in a subsidiary. Hei Ltd, as well as a number of other insignificant investments. On 1 January 2019 Cha Led acquired 80% of the ordinary share capital of Said The draft summarised statements of financial position of Cla Ltd. Hci Lid and Said ** * 30 Cha Ltd Hel La Sal Led ASSETS Non-current assets Property, plant and equipment Investments 562,000 374,000 285.000 374.000 235.000 565,000 1.127,000 72.000 47,800 Current assets Inventories Trade and other receivables Cash and cash equivalents 59.400 31.000 35.300 29.400 7.100 3.200 1.800 126,900 1.253.00 93.600 467.600 66 500 301.500 600,000 300.000 200.000 Total assets EQUITY AND LIABILITIES Equity Ordinary share capital El shares) Share premium account Retained earnings Current liabilities Trade and other payables Income tax Total equity and liabilities 200,000 280.900 1,080,900 89,700 389,700 45.600 245,600 93,000 40.900 31,900 000 173.000 1,251,900 37.000 97.900 467,600 24,000 55.000 301,500 Pages Additional information: Hd Led Sal Lad Date of acquisition 1 Oct 2015 1 Jan 2019 Percentage holding acquired 80% Consideration (note (2) (295.000 250,000 Retained camnings at date of acquisition 42.400 $1.000 Goodwill and non-controlling interest method Proportionate Fair value Cumulative goodwill impairment to 30 September 2018 6,000 Goodwill impairment for year ended 30 September 2019 3,000 (1) At the dates of acquisition the fair values of the assets. liabilities and contingent liabilities of Hel Lid and Sai Lid were equal to their carrying amounts, with one exception Sai Ltd has an interally-generated brand which was not recognised in its own financial statements. However, an independent expert valued this band at 40,000, with a useful life of five years, at 1 January 2019, the date of acquisition of Sai Led by Chad (2) The consideration for the acquisition of Head was made up of cash of 190,000 paid on 1 October 2015 and a further cash payment of 105,000, dcferred until 1 October 2016. An ante is for Cheat the most ..llmy.to 12:06 73% FR SECOND ASSIG... Q publes Income tax Total equity and abilities 80.000 171.000 2,253.900 37,000 77.900 467,600 24,000 S5,00 301.500 Papers 30 Additional informatie: Hel Lad Sald Date of acquisition 1 Oct 2015 1 Jan 2019 Percentage holding acquired Consideration note 2 295.000 250,000 Retained earnings at date of acquisition 642.400 51.000 Goodwill and non-controlling interest method Proporticale Fair value Cumulative goodwill impacto 30 September 2016 16,000 Goodwill impairment for your ended 30 September 2010 3.000 (1) Al the dines of acquisition the fair values of the assets, liabilities and contingent liabilities of Helled and Sarad were equal to their carrying out with me exception Sai Lad has an internally-generated brand which was not recognised in its own financial statements. However, an independent expert valued this brand at 40,000, with a weal life of five years, at 1 January 2019. the date of acquisition of Sai Lad by Cha Led () The consideration for the acquisition of Hei Lid was made up of each of 190,000 paid on October 2015 and a further cash payment of 105,000, deferred until October 2016. An wppropriate discount factor is 5% pa Cha Lad accounted for the deferred comidenation correctly (3) The fair value of the non-controlling interest in Said on January 2019 was 64.000 - De 1 October 2018 Gulad sold a machine to Hei Lad for 463,000. On that date the machine had a remaining useful life of six years and a carrying amount of 45,000 Requirements 4.1 Prepare the consolidated statement of financial position of Cha Led as at 30 September 2019 (19 marks) 42 set out the journal entries that will be required on consolidation to recognise the goodwill relating to the acquisition of Sul Lid in the consolidated statement of financial position of Che Ltd as at 30 September 2019, (2 marks) 43 One month atter the year end on 31 October 2019 Cla Lind sold its 65%. holding in Heited for 1346.000 Hei Lad made a profit for the month of October 2019 of 18.900 Calculate the profit or loss on disposal of Hei Led (marks) Total: 23 marks Page 1 Question 4 At October 2018 Cha Ltd had an investment in a subsidiary. Hei Ltd, as well as a number of other insignificant investments. On 1 January 2019 Cha Led acquired 80% of the ordinary share capital of Said The draft summarised statements of financial position of Cla Ltd. Hci Lid and Said ** * 30 Cha Ltd Hel La Sal Led ASSETS Non-current assets Property, plant and equipment Investments 562,000 374,000 285.000 374.000 235.000 565,000 1.127,000 72.000 47,800 Current assets Inventories Trade and other receivables Cash and cash equivalents 59.400 31.000 35.300 29.400 7.100 3.200 1.800 126,900 1.253.00 93.600 467.600 66 500 301.500 600,000 300.000 200.000 Total assets EQUITY AND LIABILITIES Equity Ordinary share capital El shares) Share premium account Retained earnings Current liabilities Trade and other payables Income tax Total equity and liabilities 200,000 280.900 1,080,900 89,700 389,700 45.600 245,600 93,000 40.900 31,900 000 173.000 1,251,900 37.000 97.900 467,600 24,000 55.000 301,500 Pages Additional information: Hd Led Sal Lad Date of acquisition 1 Oct 2015 1 Jan 2019 Percentage holding acquired 80% Consideration (note (2) (295.000 250,000 Retained camnings at date of acquisition 42.400 $1.000 Goodwill and non-controlling interest method Proportionate Fair value Cumulative goodwill impairment to 30 September 2018 6,000 Goodwill impairment for year ended 30 September 2019 3,000 (1) At the dates of acquisition the fair values of the assets. liabilities and contingent liabilities of Hel Lid and Sai Lid were equal to their carrying amounts, with one exception Sai Ltd has an interally-generated brand which was not recognised in its own financial statements. However, an independent expert valued this band at 40,000, with a useful life of five years, at 1 January 2019, the date of acquisition of Sai Led by Chad (2) The consideration for the acquisition of Head was made up of cash of 190,000 paid on 1 October 2015 and a further cash payment of 105,000, dcferred until 1 October 2016. An ante is for Cheat the most ..llmy.to 12:06 73% FR SECOND ASSIG... Q publes Income tax Total equity and abilities 80.000 171.000 2,253.900 37,000 77.900 467,600 24,000 S5,00 301.500 Papers 30 Additional informatie: Hel Lad Sald Date of acquisition 1 Oct 2015 1 Jan 2019 Percentage holding acquired Consideration note 2 295.000 250,000 Retained earnings at date of acquisition 642.400 51.000 Goodwill and non-controlling interest method Proporticale Fair value Cumulative goodwill impacto 30 September 2016 16,000 Goodwill impairment for your ended 30 September 2010 3.000 (1) Al the dines of acquisition the fair values of the assets, liabilities and contingent liabilities of Helled and Sarad were equal to their carrying out with me exception Sai Lad has an internally-generated brand which was not recognised in its own financial statements. However, an independent expert valued this brand at 40,000, with a weal life of five years, at 1 January 2019. the date of acquisition of Sai Lad by Cha Led () The consideration for the acquisition of Hei Lid was made up of each of 190,000 paid on October 2015 and a further cash payment of 105,000, deferred until October 2016. An wppropriate discount factor is 5% pa Cha Lad accounted for the deferred comidenation correctly (3) The fair value of the non-controlling interest in Said on January 2019 was 64.000 - De 1 October 2018 Gulad sold a machine to Hei Lad for 463,000. On that date the machine had a remaining useful life of six years and a carrying amount of 45,000 Requirements 4.1 Prepare the consolidated statement of financial position of Cha Led as at 30 September 2019 (19 marks) 42 set out the journal entries that will be required on consolidation to recognise the goodwill relating to the acquisition of Sul Lid in the consolidated statement of financial position of Che Ltd as at 30 September 2019, (2 marks) 43 One month atter the year end on 31 October 2019 Cla Lind sold its 65%. holding in Heited for 1346.000 Hei Lad made a profit for the month of October 2019 of 18.900 Calculate the profit or loss on disposal of Hei Led (marks) Total: 23 marks Page 1