N1612 Week 3 Workshop
Question 1
Spade acquired 80% of the share capital of Bucket on 1 July 2022. The profit for year made by Bucket for the year ended on 31 Dec 2022 was £250,000.
Below are the statements of financial position of Spade and Bucket as at 31 December 2022.
At acquisition the fair value of Bucket's plant exceeded its carrying amount by £200,000. Plants are depreciated at 20% rate (straight line method).
The fair value of the 20% non-controlling interest was £380,000.
Prepare the consolidated statement of financial position of Spade Group as at 31 December 2022, assuming the group uses the fair value method to account for non-controlling interest.
Include all relevant workings.
Question 2
Purple acquired 80% of the share capital of Rain on 1 May 2022. The retained earnings of Rain on 31 Dec 2021 were £125,000.
The fair value of the 20% non-controlling interest at acquisition was £100,000.
Goodwill should be written down to 90% of its original value to allow for impairment.
Below are the statements of financial position of as at 31 Dec 2022.
Prepare the consolidated statement of financial position of Purple Group as at 31 December 2022, assuming the group uses the fair value method to account for non-controlling interest.
Include all relevant workings.
Question 3
Purple acquired 60% of the share capital of Rain on 1 May 2022. The retained earnings of Rain on 31 Dec 2021 were £125,000.
At acquisition the fair value of Rain's plant exceeded its carrying amount by £150,000. Plants are depreciated at 20% rate (straight line method).
The fair value of the 40% non-controlling interest at acquisition was £100,000.
Goodwill should be written down to 60% of its original value to allow for impairment.
Below are the statements of financial position of as at 31 Dec 2022.
Prepare the consolidated statement of financial position of Purple Group as at 31 December 2022, assuming the group uses the fair value method to account for non-controlling interest.
Include all relevant workings.
Question 4
Purple acquired 80% of the share capital of Rain on 1 July 2022. The retained earnings of Rain on 31 Dec 2021 were £125,000.
At acquisition the fair value of Rain's plant exceeded its carrying amount by £300,000. Plants are depreciated at 10% rate (straight line method).
The fair value of the 20% non-controlling interest at acquisition was £100,000.
Goodwill should be written by 20% of its original value to allow for impairment.
Below are the statements of financial position of as at 31 Dec 2022.
Prepare the consolidated statement of financial position of Purple Group as at 31 December 2022, assuming the group uses the fair value method to account for non-controlling interest.
Include all relevant workings.