Bfbl 602 -- Seminar 4 Answers

BFBL602 -- Seminar 4 Answers

Question 6 – Mars plc

Statement of financial position as at 31 December 20X2

Assets

£        £

Non-current assets [330,000 + 157,500]        487,500

Goodwill (W2)        37,100

Current assets

Inventories [(225,000 + 67,500) - 3,000 (W3)]        289,500

Trade receivables [180,000 + 90,000]        270,000

Bank [36,000 + 18,000]          54,000

  613,500

Total assets        1,138,100

Equity and liabilities

Capital and reserves

Issued capital        196,000

General reserve [245,000 + 10,800 (W7)]        255,800

Retained earnings [222,000 (W5) + 44,000 (W4)]        266,000

717,800

Non-controlling interest (W6)        51,300

Current liabilities

Trade payables [283,500 + 40,500]        324,000

Taxation [31,500 + 13,500]          45,000

   369,000

1,138,100

Consolidated statement of income for the year ending 31 December 20X2

£

Sales [1,440,000 + 270,000 - 18,000]        1,692,000

Cost of sales [1,045,000 + 135,000 - 18,000 + 3,000 (W3)]        1,165,000

Gross profit        527,000

Expenses [123,500 + 90,000]         213,500

Profit before tax        313,500

Taxation [31,500 + 13,500]          45,000

Profit after tax        268,500

Attributable to:

Equity shareholders in Mars        262,200

Non-controlling interest [20% × £31,500]            6,300

268,500

W1: Cancel inter-company balances

•        Current accounts of £22,500

W2:        Goodwill

£        £

Investment in Jupiter        187,500

£1 Ordinary shares [80% × 90,000]        72,000

Accumulated profits [80% × 80,000]        64,000

General reserve [80% × 18,000]        14,400