ANALYSIS OF OWNERS EQUITY TOTAL NCI
@ Acquisition Since
A: At acquisition
Share capital: Class A
Retained earnings
Revaluation reserve
Goodwill
Gain from bargain purchase (P)
Consideration
ANALYSIS OF OWNERS EQUITY TOTAL NCI
@ Acquisition Since
A: At Acquisition
Share capital: Class A
Retained earnings
Revaluation reserve
Goodwill
Gain from bargain purchase (P)
Consideration
B: Between
Since acquisition to beg. current period
Retained earnings
C: Current Period
Profit for the period net of tax
Dividend
FINANCIAL ACCOUNTING 3B
UNIT 5: BUSINESS COMBINATIONS AND GROUP FINANCIAL STATEMENTS
TUTORIAL 1: SUGGESTED SOLUTION
1.1 ANALYSIS OF OWNERS EQUITY TOTAL Charlie = 100% NCI
@ Acquisition Since = 0%
A: At Acquisition
Share capital: Class A 100,000 100,000
Retained earnings 30,000 30,000
Revaluation reserve
130,000 130,000
Goodwill
Gain from bargain purchase (P) -25,000 -25,000
Consideration 105,000 105,000
B: Between
Since acquisition to beg. current period
Retained earnings
C: Current Period
Profit for the period net of tax
Dividend
1.2 Pro-forma journal entry to eliminate investment in subsidiary against equity of subsidiary at acquisition
30/06/2019 Dr Share Capital 100,000
Dr Retained Earnings 30,000
Cr Gain from bargain purchase 25,000
Cr Investment in Delta (Pty) Ltd 105,000
1.3 THE CHARLIE GROUP
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019
ASSETS
NON-CURRENT ASSETS 320,000
Property, plant and equipment 320,000
Loans
CURRENT ASSETS 135,000
Trade and other receivables -
Inventories 102,500
Bank 32,500
TOTAL ASSETS 455,000
EQUTY AND LIABILITIES
EQUITY 275,000
Share capital 200,000
Retained earnings 75,000
NON-CURRENT LIABILITIES 180,000
Long term loans 180,000
CURRENT LIABILITIES -
Trade and other payables -
TOTAL EQUITY & LIABILITIES 455,000
WORKINGS Charlie (Pty) Lt Delta (Pty) Ltd PFJE Consolidated
ASSETS
Property, plant and equipment 120,000 200,000 320,000
Investment in Delta 105,000 -105,000 -
Loan to Beta -
GOODWILL -
Trade and other receivables -
Inventories 102,500 102,500
Bank 22,500 10,000 32,500
TOTAL ASSETS 350,000 210,000 -105,000 455,000
EQUITY & LIABILITIES
Share capital 200,000 100,000 -100,000 200,000
Retained earnings 50,000 30,000 -30,000 75,000
Gain from bargain purchase 25,000
Long term loans 100,000 80,000 180,000
Trade and other payables -
TOTAL EQUITY & LIABILITIES 350,000 210,000 -105,000 455,000
FINANCIAL ACCOUNTING 3B
UNIT 5: BUSINESS COMBINATIONS AND GROUP FINANCIAL STATEMENTS
TUTORIAL 2: SUGGESTED SOLUTION
2.1 ANALYSIS OF OWNERS EQUITY TOTAL Echo = 100% NCI
@ Acquisition Since = 0%
A: At Acquisition
Share capital: Class A 100,000 100,000
Retained earnings 8,800 8,800
Revaluation reserve 20,000 20,000
128,800 128,800
Goodwill
Gain from bargain purchase (P) -18,800 -18,800
Consideration 110,000 110,000
B: Between
Since acquisition to beg. current period
Retained earnings
C: Current Period
Profit for the period net of tax
Dividend
2.2 Pro-forma journal entry to eliminate investment in subsidiary against equity of subsidiary at acquisition
31/12/2019 Dr Share Capital (B) 100,000
Dr Retained Earnings (B) 8,800
Dr Revaluation Reserve 20,000
Cr Gain from bargain purchase 18,800
Cr Investment in Foxtrot (Pty) Ltd 110,000
2.3 THE ECHO GROUP
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019
ASSETS
NON-CURRENT ASSETS 209,700
Property, plant and equipment 209,700
-
-
CURRENT ASSETS 45,900
-
Inventories 40,700
Bank 5,200
TOTAL ASSETS 255,600
EQUTY AND LIABILITIES
EQUITY 231,000
Share capital 150,000
Retained earnings 81,000
NON-CURRENT LIABILITIES 6,500
Interest bearing loan 6,500
-
CURRENT LIABILITIES 18,100
Trade and other payables 12,500
Bank overdraft 5,600
TOTAL EQUITY & LIABILITIES 255,600
WORKINGS Echo (Pty) Ltd Foxtrot (Pty) LtdPFJE Consolidated
ASSETS
Property, plant and equipment 75,800 133,900 209,700
Investment in Foxtrot 110,000 -110,000 -
GOODWILL -
-
Inventories 36,500 4,200 40,700
Bank 5,200 - 5,200
TOTAL ASSETS 227,500 138,100 -110,000 255,600
EQUITY & LIABILITIES
Share capital 150,000 100,000 -100,000 150,000
Retained earnings 62,200 8,800 -8,800 81,000
Gain from bargain purchase 18,800
Revaluation reserve 6,500 20,000 -20,000 6,500
Long term loans -
Trade and other payables 8,800 3,700 12,500
Bank overdraft 5,600 5,600
TOTAL EQUITY & LIABILITIES 227,500 138,100 -110,000 255,600
FINANCIAL ACCOUNTING 3B
UNIT 5: BUSINESS COMBINATIONS AND GROUP FINANCIAL STATEMENTS
TUTORIAL 3: SUGGESTED SOLUTION
3.1 ANALYSIS OF OWNERS EQUITY TOTAL Golf = 100% NCI
@ Acquisition Since = 0%
A: At Acquisition
Share capital: Class A 100,000 100,000
Retained earnings 40,000 40,000
Non-distributable reserve 50,000 50,000
190,000 190,000
Goodwill
Gain from bargain purchase (P) -60,000 -60,000
Consideration 130,000 130,000
B: Between
Since acquisition to beg. current period
Retained earnings
C: Current Period
Profit for the period net of tax
Dividend
3.2 Pro-forma journal entry to eliminate investment in subsidiary against equity of subsidiary at acquisition
30/09/2019 Dr Share Capital (B) 100,000
Dr Retained Earnings (B) 40,000
Dr Revaluation Reserve 50,000
Cr Gain from bargain purchase 60,000
Cr Investment in Hotel (Pty) Ltd 130,000
Pro-forma journal entry to eliminate intra-group loan
30/09/2019 Dr Interest bearing borrowing - Hotel (Pty) Ltd 20,000
Cr Unsecured loan - Golf (Pty) Ltd 20,000
3.3 THE GOLF GROUP
STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2019
ASSETS
NON-CURRENT ASSETS 260,500
Property, plant and equipment 260,500
-
-
CURRENT ASSETS 109,500
Trade and other receivables -
Inventories 53,500
Bank 56,000
TOTAL ASSETS 370,000
EQUTY AND LIABILITIES
EQUITY 355,700
Share capital 200,000
Retained earnings 155,700
NON-CURRENT LIABILITIES -
-
-
CURRENT LIABILITIES 14,300
Trade and other payables 14,300
-
TOTAL EQUITY & LIABILITIES 370,000
WORKINGS Golf (Pty) Ltd Hotel (Pty) Ltd PFJE Consolidated
ASSETS
Property, plant and equipment 103,200 157,300 260,500
Investment in Hotel 130,000 -130,000 -
Loan to Golf 20,000 -20,000 -
GOODWILL -
-
Inventories 44,000 9,500 53,500
Bank 50,000 6,000 56,000
TOTAL ASSETS 327,200 192,800 -150,000 370,000
EQUITY & LIABILITIES
Share capital 200,000 100,000 -100,000 200,000
Retained earnings 95,700 40,000 -40,000 155,700
Gain from bargain purchase 60,000
Non-distributable reserve 50,000 -50,000 -
Loan from Hotel 20,000 -20,000 -
Trade and other payables 11,500 2,800 14,300
Bank overdraft -
TOTAL EQUITY & LIABILITIES 327,200 192,800 -150,000 370,000
FINANCIAL ACCOUNTING 3B
UNIT 2: BUSINESS COMBINATIONS AND GROUP FINANCIAL STATEMENTS
TUTORIAL SUGGESTED SOLUTION
IMPALA JUJU
Assets
Property, plant and equipment 1,200,200 177,500
Investment in JuJu (Pty) Ltd 200,000 -
Trade and other receivables - -
Inventories 145,000 9,500
Bank 55,300 6,000
Total Assets 1,600,500 193,000
Equity & Liabilities
Share capital Class A (Impala = 100 000 Class A shares, JuJu =
1,000,000 100,000
5 000 Class A shares)
Retained earnings 95,000 50,000
Long term loans 20,000 -
Trade and other payables 485,500 43,000
Total Equity & Liabilities 1,600,500 193,000
CHECK - -
4.1 ANALYSIS OF EQUITY OF JUJU TOTAL IMPALA = 100% NCI
@ Acquisition Since = 0%
A: At Acquisition 30/09/2019
Share capital: Class A 100,000 100,000
Retained earnings 50,000 50,000
PPE (Revaluation to fair value) 42,500 42,500
192,500 192,500 -
Goodwill 7,500 7,500
Gain from bargain purchase (P)
Consideration 200,000 200,000 -
B: Between
Since acquisition to beg. current period
Retained earnings
C: Current Period
Profit for the period net of tax
Dividend
4.2 Pro-forma journal entry to eliminate investment in subsidiary against equity of subsidiary at acquisition
30/09/2012 Dr Share Capital 100,000
Dr Retained Earnings 50,000
Dr PPE 42,500
Dr Goodwill 7,500
Cr Investment in JuJu (Pty) Ltd 200,000
4.3 THE IMPALA GROUP
STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2019
2019
ASSETS
NON-CURRENT ASSETS 1,427,700
Property, plant and equipment 1,420,200
Goodwill 7,500
CURRENT ASSETS 215,800
-
Inventory 154,500
Bank 61,300
TOTAL ASSETS 1,643,500
EQUTY AND LIABILITIES
Share capital 1,000,000
Retained earnings 95,000
Non-distributable reserves
TOTAL EQUITY 1,095,000
NON-CURRENT LIABILITIES 20,000
Long term loans 20,000
CURRENT LIABILITIES 528,500
Trade and other payables 528,500
TOTAL EQUITY & LIABILITIES 1,643,500
WORKINGS Impala Juju PFJE Consolidated
ASSETS
Property, plant and equipment 1,200,200 177,500 42,500 1,420,200
Investment in Springbok 200,000 -200,000 -
GOODWILL 7,500 7,500
-
Trade receivables - - -
Inventories 145,000 9,500 154,500
Bank 55,300 6,000 61,300
TOTAL ASSETS 1,600,500 193,000 -150,000 1,643,500
EQUITY & LIABILITIES
Share capital 1,000,000 100,000 -100,000 1,000,000
Retained earnings 95,000 50,000 -50,000 95,000
Gain from bargain purchase - -
Non-controlling interests - -
Long term loan 20,000 - 20,000
Trade and other payables 485,500 43,000 528,500
TOTAL EQUITY & LIABILITIES 1,600,500 193,000 -150,000 1,643,500