Consolidated Statement of Financial Position

Question (CFP) 1:
The following are the summarized statements of the financial position of Apple Ltd and its
subsidiaries Mango Ltd at 31 December 2023.
Apple Ltd Mango Ltd
Assets Tk. Tk.
Non-Current Assets 240000 80000
Investment in-Mango Ltd 90000
Current Assets 70000 60000
Total 400000 140000
Equity
Share Capital(Tk. 1 Ordinary) 100000 40000
Retained Earnings 250000 70000
Total Equity 350000 110000
Liability 50000 30000
Total 400000 140000
Apple Ltd acquired its 80% shares in Mango Ltd a few years ago, when retained earnings were
Tk. 40,000. At the end of 2023, the goodwill impairment review revealed a loss of Tk. 500 in
relation to the acquisition of Mango Ltd.
Required:
Prepare the consolidated statement of financial position of Apple Ltd at 31 December 2023.

Question (CFP) 2:
The following are the summarized statements of the financial position of Sure Ltd and its
subsidiaries Pure Ltd at 31 December 2023.
Sure Ltd Pure Ltd
Assets Tk. Tk.
Non-Current Assets 340000 105000
Investment in-Pure Ltd (75%) 115000
Current Assets 70000 70000
Total 525000 175000
Equity
Share Capital(Tk. 1 Ordinary) 200000 75000
Retained Earnings 280000 65000
Total Equity 480000 140000
Liability 45000 35000
Total 525000 175000
Sure Ltd acquired its shares in Pure Ltd a few years ago, when retained earnings were Tk. 25,000.
During the year 2023, Pure Ltd sells goods that cost Tk. 2,000 to Sure Ltd Tk. By tk. 3,000. Sure
Ltd still holds the goods in inventories at the year-end.
At the end of 2023, the goodwill impairment review revealed a loss of Tk. 2500 in relation to the
acquisition of Pure Ltd.

Required:
Prepare the consolidated statement of financial position of Sure Ltd at 31 December 2023.
 Consolidated Statement of Financial Position
Question 4 (CFP):
The summarized balance sheets of Guitar Ltd and Piano Ltd as at 31st December 2018 were as
follows.
Guitar Ltd Piano Ltd
Tk. Tk. Tk. Tk.
Assets
Non-Current Assets
Property Plant Equipment 80,000 58,200
Investments 84,000
164,000 58,200
Current Assets
Inventories 18,000 12,000
Trade and Other Receivable 62,700 21,100
Investment 2,500
Cash & Cash Equivalent 10,000 3,000
Current Account-Guitar Ltd. 3,200
90,700 41,800
Total Assets 254,700 100,000
Equity & Liability
Equity
Ordinary Share Capital (Tk. 1 Shares) 120,000 60,000
Share Premium Account 18,000
Revaluation Surplus 23,000 16,000
Retained Earning 56,000 13,000
Total Equity 217,000 89,000
Current Liability
Trade and Other Payable 35,000 11,000
Current Account-Piano Ltd 2,700
Total Liability 377,00 11,000
Total Equity and Liability 254,700 100,000

The following information is relevant.

 On 1st January 2016 Guitar Ltd acquired 48,000 shares in Piano Ltd for Tk. 84,000 cash when
the retained earnings of Piano Ltd were Tk. 8,000 and the balance on the revaluation reserve
was Tk. 16,000.
 The inventories of Guitar Ltd include Tk. 10,000 of goods from Piano Ltd invoiced to Guitar
Ltd at cost plus 25%.
 On acquisition date, the fair value of Piano Ltd Property and Plant Equipment with a
remaining useful life of 10 years was Tk. 20,000 higher than carrying amount but this was
not reflected in Piano Ltd books of account.
 A cheque for Tk. 500 from Guitar Ltd to Piano Ltd, sent before 31st December 2018, was not
received by the latter company until January 2019
 An impairment review at 31st December 2018 revealed that goodwill in respect of Piano Ltd
had fallen in value over the year by Tk. 500. By 1st January 2018 this goodwill had already
suffered impairments totaling Tk. 170.

Required:
Prepare the consolidated balance sheet of Guitar Ltd and its subsidiary Piano Ltd as at 31st
December 2018.
Answer: Post Acquisition Tk. -3000, Goodwill Balance=130, R/E=52930, Total Assets=280130
 Consolidated Statement of Financial Performance
Question 1 (Consolidated P/L):
The following are the draft income statements for the year ended 30 September 2020 of Titan Ltd and
its subsidiary Seiko Ltd.

Titan Ltd Seiko Ltd

Descriptions Tk ,000 Tk ,000
Revenue 1100 400
Cost of Sales (600) (240)
Gross Profit 500 160
Distribution Cost (60) (50)
Administrative Cost (65) (55)
Profit from Operations 375 55
Investment Income 20 5
Finance Cost (25) (6)
Profit before Tax 370 54
Income Tax (160) (24)
Profit After Tax 210 30

The following information is relevant:

i) Titan Ltd acquired 80% of Seiko Ltd many years ago, when the retained earnings of that company
were Tk. 5,000. Both companies have only ordinary shares in issue.
ii) Total intra-group sales in the year amounted to Tk. 200,000, Titan Ltd selling to Seiko Ltd.
iii) At the year end the balance sheet of Titan Ltd included inventory purchased from Seiko Ltd.
Seiko Ltd had recognized a profit of Tk. 4,000 on this inventory.
iv) The retained earnings of Titan Ltd and Seiko Ltd as of 30 September 2019 were Tk. 90,000 and
Tk. 40,000 respectively. Seiko Ltd’s share capital is comprised of Tk. 50,000 Tk. 1 ordinary
shares.
v) Titan Ltd paid a dividend of Tk. 100,000 in the year. Seiko Ltd paid an equivalent dividend of Tk.
20,000.
Required:
Prepare a consolidated Profit or Loss Statement for the year ended 30 September 2020.

1|Page
 Consolidated Statement of Financial Performance

Question 2 (Consolidated P/L):

Dhaka Ltd acquired its 80% interest in the ordinary shares and 25% interest in the redeemable
preference shares of Sylhet Ltd for Tk. 9,000 and Tk. 10,000 respectively on 1 April 2018 when
Sylhet Ltd’s retained earnings were Tk. 4,000. There were no other reserves at that date. The
preference shares carry no votes.
The following are the draft statement of financial performance of Dhaka Ltd and Sylhet Ltd for the
year ended 31 March 2024.

Dhaka Ltd Sylhet Ltd

Tk. Tk. Tk. Tk.
Revenue 247500 181250
Dividends from Sylhet Ltd
Ordinary 4800 -
Preference 150 -
Bank deposit interest 250 100
252700 181350
Less:
Cost of sales 126480 86520
Distribution costs 67315 42885
Administrative costs 25555 17295
Preference dividends paid 600
-219350 -147300
33350 34050
Income tax expense -29000 -15100
Profit for the year 4350 18950

The following information is also available:

i) The inventory of Dhaka Ltd at 31 March 2024 includes goods purchased from Sylhet Ltd
at a profit to that company of Tk. 700. Total intra-group sales for the year amounted to
Tk. 37,500.
ii) On 1 April 2023, Dhaka Ltd sold plant costing Tk. 7,000 to Sylhet Ltd for Tk. 10,000.
The profit on sale has been taken to cost of sales. Depreciation has been provided by
Sylhet Ltd at 10% per annum on the cost of Tk. 10,000.
iii) Sylhet Ltd’s issued share capital comprises 10,000 Tk. 0.50 ordinary shares and 4,000 Tk.
1, 15% redeemable preference shares.
iv) Four years ago, a goodwill impairment loss was recognized in Dhaka Ltd’s consolidated
financial statements leaving goodwill in the consolidated statement of financial position
at Tk. 1,200. A further Tk. 180 impairment loss needs to be recognized in the current
year.
v) Retained earnings at 1 April 2023 were Tk. 576,000 for Dhaka Ltd and Tk. 72,600 for
Sylhet Ltd.
vi) Non-controlling interest is measured on the proportionate basis.
Required:
Prepare the consolidated statement of financial performance for the year ended 31 March
2024
2|Page
 EPS

Assignment EPS-1:
The information below pertains to Basus Company for 2015.

Net income for the year $1,200,000

7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of
common stock $2,000,000.
6% convertible, cumulative preferred stock, $4,000,000 $100 par value; each share is convertible into
4 shares of common stock
Common stock, $10 par value $6,000,000
Tax rate for 2015 30%
Average market price of common stock $ 30 per share

There were no changes during 2015 in the number of common shares, preferred shares, or convertible
bonds outstanding. There is no treasury stock. The company also has common stock options (granted
in a prior year) to purchase 75,000 shares of common stock at $20 per share.

Required:
(a) Compute basic earnings per share for 2015. (b) Compute diluted earnings per share for 2015.

Assignment EPS-2:
Xerox Corporation reported a net income of $2,500,000 for the year ended on 31st December 2023.
The company had 1,000,000 common shares outstanding at the beginning of the year. During the
year, Xerox issued convertible bonds that can be converted into 200,000 additional common shares.
The bonds are convertible at the discretion of the bondholders, and the company does not expect them
to be converted. The converted bonds can carry an interest rate of 8% and will have a total face value
of $2,000,000. The corporate tax rate is 30%.

On 1st July 2023 company issued further 200000 ordinary share. There were no other changes during
2023 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no
treasury stock. The company also has common stock options (granted in a prior year) to purchase
75,000 shares of common stock at $20 per share. The fair Market price of the share was Tk. 25 per
share.

Required:

i) Calculate the Basic Earnings Per Share (Basic EPS)

ii) Calculate the Diluted Earnings Per Share (Diluted EPS), assuming the convertible bonds
are converted into common shares.

2|Page