Consolidation Financial Statements Worksheet - Assignment Example

Name: Course: Instructor: University: Date: Consolidation Financial Statement 1. Acquisition Analysis as at 1st July, 2011 Net fair value of the identifiable assets and liabilities of Rat Ltd Company Share Capital 200 000 + General Reserve 75 000 + Retained Earnings 45 000 - Dividend payable (10 000) - Provisions (206 500) + Inventory (80 000- 70 000) (1-30%) + Land (70 000- 50 000) (1-30 %) + Plant (190 000- 182 000) (1-30 %) + Machinery (16 000 – 15 000) (1-30%) + Trademark (110 000 -100 000) (1-30%) + Equipment (53 000 – 50 000) (1-30%) + Fittings (10 000 - 10 000) (1-30%) – Goodwill (25 000) Acquisition expenses 5 000 = 316 400 Goodwill acquired = 316 000 Non-recorded Goodwill = 316 000 – 25 000 = 291400 2. The BCVR Worksheet Journal Entries as at 30th June, 2012 Dr Cr Inventory Deferred Tax Liability BCVR 10,000 3,000 7,000 Land Deferred Tax Liability BCVR 20,000 4,000 16,000 Plant Deferred Tax Liability BCVR 8,000 2,400 5,600 Machinery Deferred Tax Liability BCVR 1,000 300 700 Trademark Deferred Tax Liability BCVR 10,000 3,000 7,000 Equipment Deferred Tax Liability BCVR 3,000 900 2,100 Goodwill BCVR 316,000 316,000 Pre-Acquisition Worksheet Journal Entries as at 30th June, 2012 Dr Cr Retained Earnings Share Capital BCVR Shares in Snake 45,000 200,00 85,000 330,000 3. The Consolidation Worksheet Journal Entries as at 30th June 2013 Dr Cr Goodwill Other Expenses Dividend Paid Dividend Declared Other expenses (Rat) 25,000 31,000 5,000 4,000 57,000 Share capital General Reserve Asset Revaluation Reserve Retained Earnings Dividend Payable Retained Earnings Investments in Snake 200,000 25,000 2,100 45,000 4,000 50,000 221,100 4. The Consolidation Worksheet as at 30th June, 2013 The consolidated worksheet will include the financial statements of the pare of the Snake Ltd. Company and the Rat Ltd. Company on a line by line basis and adjustments for valuations at acquisition date, pre-acquisition equity and intra-group transactions. Consolidated Worksheet- Balance Sheet as at 30th June 2013 Account Name Snake Ltd Rat Ltd Adjustments Group     Dr Cr     Shares in Rat Ltd 330 000 0         330 000 Cash 2 800 40 000         42 800 Receivables 6 000 5 000         11 000 Inventory 20 000 50 000         70 000 Deferred tax assets 10 200 0         10 200 Motor Vehicle 10 000 20 000         30 000 Fittings 0 15 000         15 000 Machinery 15 000 15 000         30 000 Plant 123 000 300 000         423 000 Equipment 53 000 53 000         106 000 Land 25 000 50 000         75 000 Furniture 7 000 8 000         15 000 Trademark 0 100 000         100 000 Goodwill 0 25 000   25 000     25 000 Cost of sales 162 000 128 000         290 000 Other expenses 59 000 31 000   31 000     90 000 Income tax expense 20 000 18 000         38 000 Dividend paid 12 000 5 000   5 000     17 000 Dividend declared 6 000 4 000     4 000   6 000 Loan to Rat Ltd 6 000 0         6 000    867 000 867 000         1 729 000  Consolidated Worksheet- Income Statement as at 30th June 2013 Account Name Snake Ltd Rat Ltd Adjustments Group     Dr Cr                     Share capital 312 000 200 000   200 000     312 000 General Reserve 20 000 25 000   25 000     20 000 Asset Revaluation Reserve 0 2 100   2 100     0 Retained Earnings (1/7/12) 30 000 45 000   45 000 50 000   80 000 Dividend Payable 6 000 4 000   4 000     6 000 Current Tax Liabilities 8 000 2 500         10 500 Provisions 120 000 204 400         120 000 Loan from Snake Ltd 0 6 000         6 000 Sales 220 000 188 000         408 000 Other income 84 000 30 000         114 000 Accumulated depreciation - Plant 34 000 114 000         (114 000) Accumulated depreciation – Machinery 1 000 3 000         (3 000) Accumulated depreciation - Furniture 1 000 2 000         (2 000) Accumulated depreciation - Fittings 0 5 000         (5 000) Accumulated depreciation - Equipment 30 000 30 000         (30 000) Accumulated depreciation - Motor Vehicle 1 000 6 000         (6 000) Investment in Rat Ltd   867 000 867000         916,500  5. The Consolidated Financial Statement at 30th June 2013 The consolidated financial statements will contain the financial information of the parent company (snake Ltd) together with that of the subsidiary company (Rat ltd). Their accounts are combined line by line by adding the assets, the liabilities, equity, income and expense in 2013. Consolidated Balance Sheet as at 30th June 2013 content Snake ltd “$” Rat ltd “$” Group “$” Cash 2 800 40 000 42 800 Receivables 6 000 5 000 11 000 Inventory 20 000 50 000 70 000 Deferred tax assets 10 200 - 10 200 Goodwill - 25 000 25 000 Total current assets 39 000 120 000 159 000 Moto vehicle 10 000 20 000 30 000 Fittings - 15 000 15 000 Machinery 15 000 15 000 30 000 Plant 123 000 300 000 423 000 Equipment 53 000 53 000 106 000 Land 25 000 50 000 75 000 Furniture 7 000 8 000 15 000 Trademark - 100 000 100 000 Total fixed assets 233 000 561 000 794 000 Total assets 959 000 Dividend payable 6 000 4 000 10 000 Current tax liabilities 8 000 2 500 10 500 Loan from Snake ltd - 2 100 2 100 provisions 120 000 204 000 324 000 Total liabilities 134 000 212 600 346 600 Owner’s equity Retained earnings 30 000 45 000 75 000 Retained loss 38 000 (57 000) (19 000) Share capital 312 000 200 000 512 000 General reserve 20 000 25 000 45 000 Total owner’s equity and liabilities 400 000 213 000 959 000 Consolidated Income Statement as at 30th June 2013 Content Snake ltd “$” Rat ltd “$” Group “$” Sales 220 000 188 000 408 000 Cost of sales 162 000 128 000 290 000 Gross income 58 000 60 000 118 000 Operating expenses Plant depreciation 34 000 114 000 148 000 Machinery depreciation 1 000 3 000 4 000 Furniture depreciation 1 000 2 000 3 000 Fittings depreciation - 5 000 5 000 Equipment depreciation 30 000 30 000 60 000 Motor depreciation 1 000 6 000 7 000 Total operating expenses 67 000 160 000 227 000 Operating income (9 000) (100 000) (109 000) Other income 84 000 30 000 114 000 Operating income before interest and tax 75 000 (70 000) 5 000 Income tax expenses 20 000 18 000 38 000 Income after tax 50 000 (52 000) (2 000) Dividend paid 12 000 5 000 17 000 Retained earnings/loss 38 000 (57 000) (19 000) Read More