The financial statements of three companies are as follows:
Statement of financial position Ocean Sea Lake
GHS000 GHS000 GHS000
Investment in Sea (90%) 800
Investment in Lake (40%) 500
Investment in Lake (30%) 800
Assets 700 250 800
2,000 1,050 800
Share capital (GHS1) 500 200 80
Share premium 500 Nil 60
Retained earnings 850 400 510
Equity 1,850 600 650
Liabilities 150 450 150
2,000 1,050 800
Statements of profit or loss Ocean Sea Lake
GHS000 GHS000 GHS000
Revenue 3,150 2,000 2,500
Operating costs (2,300) (1,820). (2,000)
Operating profit 850 180 500
Tax (350) (80) (250)
Profit for the year 500 100 250
Additional information
- Ocean made its investment in Sea three years ago when the retained earnings of Sea were GHS200,000, the fair value of the NCI was GHS50,000 and the fair value of the net assets GHS500,000. The fair value adjustment relates to the non-depreciable asset of land.
- Ocean made its investment in Lake two years ago when the retained earnings of Lake were GHS100,000. The initial investment gave Ocean significant influence over the financial and operating policies of Lake. At that date the carrying value of the net assets were not materially different from their fair value.
- Sea made its investment in Lake six months ago. At that date the book value of the net assets were not materially different from their fair value. At that date the fair value of the Oceans investment in Lake was GHS700,000 and the fair value of the effective NCI in Lake was GHS700,000.
- Ocean has a policy always to calculate goodwill in full on the acquisition of a subsidiary. The impairment reviews reveal no impairment losses are to be recorded. No dividends have been paid in the current year. No group company has issued any shares in the last three years. Profits are assumed to accrue evenly.
Required:
Prepare the consolidated statement of financial position and the consolidated statement of profit or loss of Ocean.
The financial statements of three companies are as follows:
Statement of financial position Ocean Sea Lake
GHS000 GHS000 GHS000
Investment in Sea (90%) 800
Investment in Lake (40%) 500
Investment in Lake (30%) 800
Assets 700 250 800
2,000 1,050 800
Share capital (GHS1) 500 200 80
Share premium 500 Nil 60
Retained earnings 850 400 510
Equity 1,850 600 650
Liabilities 150 450 150
2,000 1,050 800
Statements of profit or loss Ocean Sea Lake
GHS000 GHS000 GHS000
Revenue 3,150 2,000 2,500
Operating costs (2,300) (1,820) (2,000)
Operating profit 850. 180 500
Tax (350) (80) (250)
Profit for the year 500 100 250
Additional information
- Ocean made its investment in Sea three years ago when the retained earnings of Sea were GHS200,000, the fair value of the NCI was GHS50,000 and the fair value of the net assets GHS500,000. The fair value adjustment relates to the non-depreciable asset of land.
- Ocean made its investment in Lake two years ago when the retained earnings of Lake were GHS100,000. The initial investment gave Ocean significant influence over the financial and operating policies of Lake. At that date the carrying value of the net assets were not materially different from their fair value.
- Sea made its investment in Lake six months ago. At that date the book value of the net assets were not materially different from their fair value. At that date the fair value of the Oceans investment in Lake was GHS700,000 and the fair value of the effective NCI in Lake was GHS700,000.
- Ocean has a policy always to calculate goodwill in full on the acquisition of a subsidiary. The impairment reviews reveal no impairment losses are to be recorded. No dividends have been paid in the current year. No group company has issued any shares in the last three years. Profits are assumed to accrue evenly.
Required:
Prepare the consolidated statement of financial position and the consolidated statement of profit or loss of Ocean.
kindly show workings thanks..
