Reference no: EM131135461

Assignment 1

STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2012
	P LTD	S LTD
ASSETS
Fixed property	70 000	48 500
Plant	6 400	5 000
Gross carrying amount	10 000	12 500
Accumulated depreciation	(3 600)	(7 500)
Furniture	2 500	1 500
Gross carrying amount	5 000	5 000
Accumulated depreciation	(2 500)	(3 500)
Investment in S Ltd at fair value:37 500 shares (cost: $52 500)	52 500	-
Investment in unlisted shares	-	12 500
Current account: S Ltd	10 000	-
Trade receivables	22 500	11 500
Inventories	8 000	14 000
Bank	26 925	31 875
Total assets	198 825	124 875
EQUITY AND LIABILITIES
Share capital (100 000/50 000 shares)	100 000	50 000
Retained earnings	77 325	49 000
Current account: P Ltd	-	4 375
Dividend payable	5 000	7 500
Trade & other payables	16 500	14 000
Total equity and liabilities	198 825	124 875

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2012
	P LTD	S LTD
Revenue	100 000	75 000
Cost of sales	(55 000)	(55 000)
Gross profit	45 000	20 000
Other expenses	(15 075)	(4 525)
Dividend received	5 625	500
Interest received	2 400
Profit before tax	37 950	15 975
Income tax expense	(10 625)	(4 475)
PROFIT FOR THE YEAR	27 325	11 500
Other comprehensive income for the year	-	-
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	27 325	11 500

EXTRACT FROM THE STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2012
	P LTD	S LTD
Balance at 1 July 2011	60 000	45 000
Changes in equity for 2012
Total comprehensive income for the year:
Profit for the year	27 325	11 500
Ordinary dividend paid and provided	(10 000)	(7 500)
Balance at 30 June 2012	77 325	49 000

Additional information

1. P Ltd acquired the interest in S Ltd on 30 June 2009 when the equity of S Ltd was as follows;

   Share Capital $50 000

   Retained earnings $17 500

2. On 1 January 2010, S Ltd sold non-depreciable fixed property with an original cost price of $25 000 to S Ltd for $28 500. The property is classified as property, plant and equipment and still in possession of S Ltd.

3. On 30 June 2011, S Ltd sold furniture that cost $6 250 and on which accumulated depreciation to the amount of $1 250 was recognized to P Ltd for $5 000. P Ltd classifies this furniture under property, plant and equipment.

4. S Ltd purchases all its inventories from P Ltd at cost price plus 25%. Total inventories to the value of $37 500 were sold to S Ltd by P Ltd during the reporting period. Inventories in the records of S Ltd were $12 500 on 1 July 2011. At the end of the reporting period, S Ltd owed P Ltd $11 500 in respect of the inventories purchased from P Ltd. These amounts are included in trade receivables and trade & other payables.

5. On 30 June 2010, S Ltd sold 2 machines with a carrying amount of $9 000 each to P Ltd for a total amount of $20 000. P Ltd uses the plant in the production of inventories. Both companies write off depreciation on plant at 20% per annum on the diminishing balance method. On 29 June 2012, P Ltd sold one of the machines at a slight profit that was set off against other expenses.

6. Assume that the identifiable assets acquired and the liabilities assumed at acquisition date are shown at their acquisition-date fair values, as determined in terms of IFRS 3.

7. P Ltd classified the equity investment in S Ltd under IFRS 9 in its separate financial statements and recognized fir value adjustments in a mark-to-market reserve (other comprehensive income).

8. P Ltd elected to measure any non-controlling interests in an acquiree at their proportional share of the acquiree's identifiable net assets.

9. Ignore deferred tax implications

   Required

   Prepare the following consolidated statements for the P Ltd Group for the reporting period ended 30 June 2012.

1. Consolidated statement of financial position 22 marks

2. Consolidated statement of changes in equity 7 marks

3. Analysis of owner's equity 11marks