QUESTION 4 (complex groups) (20)

The following are the abridged trial balances of A Limited, B Limited and C Limited at 31 December 2019:

	A	B	C
	$	$	$
CREDITS
Share capital:
-100 000 ordinary shares	100 000
-80 000 ordinary shares		80 000
-30 000 ordinary shares			60 000
Retained earnings	200 000	150 000	110 000
Profit for the period	345 000	220 000	95 000
	645 000	450 000	265 000
DEBITS
Property plant and Equipment	266 500	284 000	136 500
Investment in equity instruments:
Investment in B. Ltd	110 000
Investment in C. Ltd	100 000
Trade and other receivables	35 000	60 000	65 000
Income tax expense	103 500	66 000	28 500
Dividends paid	30 000	40 000	35 000
	645 000	450 000	265 000

Additional information

Note 1. A Limited purchased 60 000 shares in B Limited on 1 January 2016, when B Limiteds retained earnings amounted to $60 000. On 1 January 2017 A Limited acquired 27 000 shares in C Limited, when the retained earnings of C Limited amounted to $40 000. On both acquisition dates, A Limited acquired control over the respective companies and the fair values of the identifiable assets, liabilities and contingent liabilities were considered to be equal to the carrying amounts of these items.

Note 2. Each share carries 1 vote.

Note 3. The group uses the partial goodwill method to recognise goodwill. (The non-controlling interests are measured at their proportionate interest in the net identifiable assets of the acquiree) Goodwill was not considered to be impaired at year-end.

Note 4. The fair values of investments in equity instruments are equal to the cost price thereof. The equity investments are measured at fair value through other comprehensive income (FVTOCI).

Required: Prepare the consolidated annual financial statements of the A Limited Group for the year ended 31 December 2019. Your answer must comply with the requirements of International Financial Reporting Standards. No notes are required. Ignore comparative figures (20) CAF 3871

Finacial accounting 3A