Professional Documents
Culture Documents
$000
$000
Non-current assets
Goodwill (W3) 67,405
Property, plant and equipment 488,175
(345,000 1000 +250 + 141,000 + 3,000 FV adj 75 FV depn )
Investments 28
(179,530 120,000 cash 6,530 deferred 28,000 Alec -24,972
FVOCI)
Investment in Associate (W6) 25,000
580,608
Current assets
Inventory (43,000 + 17,320) 60,320
733,928
Note: The discount on the deferred consideration needs to be unwound, as Panini accounted for it at the start
of the year. As the SOFP is exactly one year later, a years unwinding must be performed. 7% 6,530 = $457
(Dr RE w5, Cr Deferred Consideration)
25%
Panini
75% 01/07/13
100,000 122,925 22,925
152,000 148,000 (4,000)
(W5/W6)
*Note The $4,000 post acquisition loss is calculated by time-apportioning Alecs loss for the year. Alec has
made a $16,000 loss for the year, and Panini has had an influence for 3 months. Therefore 3/12 x $16,000 =
$4,000.
(W3) Goodwill
$000
Controlling interest:
Cash 120,000
150,530
Fair value of NCI
16,875
(NCI owns 3,750 shares (25% x 15,000 K shares), @ 4.50 each)
167,405
$ 0 00
$000
$000
Note 1a
Note 1b
Dr RE of Kwaku 75,000
Note 2a
Dr RE of Kwaku 1000,000
Note 2a
Dr Panini 250,000
Cr RE of Panini 250,000
Note 3
Dr RE of Panini 24,972,000
Note 4a
Note 4a
This is a sale within the same company, so the carrying value of the fixed asset instead of the selling price
As $5,000,000 was recorded in its books by Panini there was, therefore, an over-statement of $1,000,000. The
depreciation charge of $250,000 on the over-statement which Panini applied, must be reversed.
Cr RE of Panini 250,000
Kwakus Trade receivable balance differed from Paninis Trade payables balance by $2,000,000 because this