1.

P group consolidated statement of financial position as at 31 December 2011

$000 $000
Non-current assets
Property, plant and equipment (1,000 + 500) 1,500
Goodwill (W) 300
1,800
Current assets
Inventory (300 + 250) 550
Trade receivables (200 + 150) 350
Bank (300 + 200) 500
1,400
Total assets 3,200
Equity and liabilities
Equity
Share capital ($1 each) 500
Retained earnings (W) 875
1,375
Non-controlling interest (W) 225
Non-current liabilities
Loan notes (100 + 50) 150
Current liabilities
Trade payables (1,000 + 450) 1,450
Total equity and liabilities 3,200


Goodwill
$000
Investment at cost 450
Fair value of NCI at acquisition 150
600
Less: Fair value of net assets at acquisition (300)
Goodwill at acquisition 300

Non-controlling interest (NCI)
$000
Fair value of NCI at acquisition 150
NCI % post acquisition reserves of subsidiary 75
(25% x $300)
NCI to CSFP 225

Consolidated reserves = Retained Earning
$000
100% Parent at year end 650
Group % post acquisition reserves of subsidiary 225
(75% x $300)
Total to CSFP 875




2. P makes profit, 100% inventory left
Price 100,000 125%
Cost (Bal fig) (80,000) 100%
PUP (100,000 / 125 x 25) 20,000 25%

3. S makes profit, $7m inventory left
Price $m7 100%
Cost (Bal fig) (6.65) 95%
PUP ($7m x 5%) 0.35 5%

4. S makes profit, $900,000 inventory left
Price 900 120%
Cost (Bal fig) (750) 100%
PUP ($900 / 120 x 20) 150 20%

5. P makes profit, inventory left
Price ($2m x ) 500
Cost ($1.5m x ) (375)
PUP 125






6. S net assets list
At 1 Jan 2011 At 31 Dec 2011
$000 $000
Equity ($1) share capital 300,000 300,000
Share premium 150,000 150,000
Retained earnings 100,000 160,000
Fair value adjustment 10,000 10,000
($50m - $40m)
560,000 620,000
Goodwill
$000
Investment at cost 600,000
Fair value of NCI at acquisition 200,000
800,000
Less: Fair value of net assets at acquisition (560,000)
Goodwill at acquisition 240,000

7.
1. Shares acquired = 8,000 x 80% acquired = 6,400 shares acquired in Salid.
2. Placid shared issued = 6,400 acquired / 2 x 3 = 9,600 shares issued.
3. Value of Placids shares issued = 9,600 x $3 = $28,800 cost of investment.
8.
1. Shares acquired = 6 million shares acquired in S.
2. P shared issued = 6 million acquired / 2 x 1 = 3 million shares P issued.
3. Value of P shares issued = 3 million x $8 = $24 million value of share exchange.
4. Cost of investment:
Cash (6 million x $2.50) $15 million
Share exchange (from above) $24 million
Total cost of investment $39 million

10. Group revenue for the year ended 30 November 2011
$
Parent 2,200,000
Subsidiary ($600,000 / 12 x 2) 100,000
Group 2,300,000

9.