1. Mock 1: Cash
Additional information:
▪ All assets/liabilities of S Co were carried at fair value on 30 June 2017
▪ The share capitals of P Co and S Co have not changed since the acquisition
▪ The retained earnings of S Co were $30,000 on 30 June 2017
▪ Goodwill arising on consolidation has suffered an impairment loss of 25%
▪ Non-controlling interest in the statement of financial position will be measured using the
appropriate proportion of the subsidiary’s identifiable net assets
Required:
a) Prepare group statement of financial position as at 30 June 2018
b) Prepare group statement of comprehensive income as at 30 June 2018
c) Prepare group statement of changes in equity as at 30 June 2018
2. Mock 2 Q1: Cash
▪ The fair value of PPE is estimated to be £110,000 instead of £100,000 reported in S Co’s
books
▪ The share capitals of P Co and S Co have not changed since the acquisition
▪ The retained earnings of S Co were £30,000 on 30 June 2017
▪ Goodwill arising on consolidation has suffered an impairment loss of 25%
▪ Non-controlling interest in the statement of financial position will be measured using the
appropriate proportion of the subsidiary’s identifiable net assets
Required:
d) Prepare group statement of financial position as at 30 June 2018
e) Prepare group statement of comprehensive income as at 30 June 2018
f) Prepare group retained earnings as at 30 June 2018
3. Mock 2 Q2: acquire 100% / cash / capital
a/ Prepare a consolidated statement of financial position as at the close of business on 1
January 2018, assuming that the purchase consideration of £225,000 was paid in cash
b/ Prepare a consolidated statement of financial position as at the close of business on 1
January 2018, assuming that the purchase consideration of £225,000 was settled by
means of an issue of 150,000 £1 ordinary shares of P Co at a premium of 50p per share.
4. Mock 2 Q3: Cash / associate account
▪ In the draft statement of I Co, the company’s investment in A Co is recognised at cost
(£100,000) and the dividend received from A Co (£12,000) has been recognised as
income. These financial statements do NOT apply the correct “equity method”
accounting (Note: The question asks you to do the correct application of the equity
method accounting, obviously)
▪ The share capitals of I Co and A Co have not changed since the acquisition
,▪ The retained earnings of A Co was £200,000 on 30 June 2017.
▪ All of A Co’s assets and liabilities were carried at fair value.
▪ During the year to 30 June 2018, I Co bought goods from A Co for £30,000 which had cost
to A Co £20,000. Half of these goods were unsold by I Co at 30 June 2018
Required:
a) Prepare group statement of financial position as at 30 June 2018
b) Prepare group statement of comprehensive income as at 30 June 2018
c) Prepare group statement of changes in equity as at 30 June 2018
5. Mock 2 Q4: Capital
▪ The share capitals of P Co and S Co have not changed since the acquisition
▪ All of S Co’s assets and liabilities were carried at fair value.
▪ The retained earnings of S Co were $40,000 on 30 June 2017
▪ During the year, S Co sold items worth of £20,000 to P Co at 20% profit margin. 50% of
these items still remain in P Co’s inventory.
▪ Goodwill arising on consolidation has suffered an impairment loss of 50%
▪ Non-controlling interest in the statement of financial position will be measured using the
appropriate proportion of the subsidiary’s identifiable net assets
Required:
a) Prepare group statement of financial position as at 30 June 2018
b) Prepare group statement of comprehensive income as at 30 June 2018
c) Prepare group statement of changes in equity as at 30 June 2018
6. Mock 3 Q1: acquire 100% / cash / capital
▪ The fair value of PPE was £150,000 for S Co on the acquisition date
Required:
a) Prepare a consolidated statement of financial position as at the close of business on
1 January 2018, assuming that the purchase consideration of £225,000 was paid in
cash
b) Prepare a consolidated statement of financial position as at the close of business on
1 January 2018, assuming that the purchase consideration of £225,000 was settled
by means of an issue of 150,000 £1 ordinary shares of P Co at a premium of 50p per
share.
7. Mock 3 Q2: Capital
▪ The fair value and book value of assets/liabilities of the S Co were identical at the time of
the acquisition and have not changed since then.
▪ The share capital of P Co and S Co have not changed since the acquisition
▪ The retained earnings of S Co were £200,000 on 1 July 2017 (acquisition date)
▪ Goodwill arising on consolidation has suffered no impairment since the acquisition
, ▪ Non-controlling interest in the statement of financial position will be measured using the
appropriate proportion of the subsidiary’s identifiable net assets
▪ Both companies prepare their financial statements on 31st of December
▪ 50% of the net profit is attributable to the second half of the year
Required:
g) Prepare group statement of financial position as at 30 September 2017
h) Prepare group retained earnings as at 30 September 2017
8. Mock 3 Q3: Cash
At the time of the acquisition S Co’s retained earnings were £10,000
Both companies’ reporting period is 31 st of December each year
Required:
Prepare the consolidated statement of financial position
Additional information:
▪ All assets/liabilities of S Co were carried at fair value on 30 June 2017
▪ The share capitals of P Co and S Co have not changed since the acquisition
▪ The retained earnings of S Co were $30,000 on 30 June 2017
▪ Goodwill arising on consolidation has suffered an impairment loss of 25%
▪ Non-controlling interest in the statement of financial position will be measured using the
appropriate proportion of the subsidiary’s identifiable net assets
Required:
a) Prepare group statement of financial position as at 30 June 2018
b) Prepare group statement of comprehensive income as at 30 June 2018
c) Prepare group statement of changes in equity as at 30 June 2018
2. Mock 2 Q1: Cash
▪ The fair value of PPE is estimated to be £110,000 instead of £100,000 reported in S Co’s
books
▪ The share capitals of P Co and S Co have not changed since the acquisition
▪ The retained earnings of S Co were £30,000 on 30 June 2017
▪ Goodwill arising on consolidation has suffered an impairment loss of 25%
▪ Non-controlling interest in the statement of financial position will be measured using the
appropriate proportion of the subsidiary’s identifiable net assets
Required:
d) Prepare group statement of financial position as at 30 June 2018
e) Prepare group statement of comprehensive income as at 30 June 2018
f) Prepare group retained earnings as at 30 June 2018
3. Mock 2 Q2: acquire 100% / cash / capital
a/ Prepare a consolidated statement of financial position as at the close of business on 1
January 2018, assuming that the purchase consideration of £225,000 was paid in cash
b/ Prepare a consolidated statement of financial position as at the close of business on 1
January 2018, assuming that the purchase consideration of £225,000 was settled by
means of an issue of 150,000 £1 ordinary shares of P Co at a premium of 50p per share.
4. Mock 2 Q3: Cash / associate account
▪ In the draft statement of I Co, the company’s investment in A Co is recognised at cost
(£100,000) and the dividend received from A Co (£12,000) has been recognised as
income. These financial statements do NOT apply the correct “equity method”
accounting (Note: The question asks you to do the correct application of the equity
method accounting, obviously)
▪ The share capitals of I Co and A Co have not changed since the acquisition
,▪ The retained earnings of A Co was £200,000 on 30 June 2017.
▪ All of A Co’s assets and liabilities were carried at fair value.
▪ During the year to 30 June 2018, I Co bought goods from A Co for £30,000 which had cost
to A Co £20,000. Half of these goods were unsold by I Co at 30 June 2018
Required:
a) Prepare group statement of financial position as at 30 June 2018
b) Prepare group statement of comprehensive income as at 30 June 2018
c) Prepare group statement of changes in equity as at 30 June 2018
5. Mock 2 Q4: Capital
▪ The share capitals of P Co and S Co have not changed since the acquisition
▪ All of S Co’s assets and liabilities were carried at fair value.
▪ The retained earnings of S Co were $40,000 on 30 June 2017
▪ During the year, S Co sold items worth of £20,000 to P Co at 20% profit margin. 50% of
these items still remain in P Co’s inventory.
▪ Goodwill arising on consolidation has suffered an impairment loss of 50%
▪ Non-controlling interest in the statement of financial position will be measured using the
appropriate proportion of the subsidiary’s identifiable net assets
Required:
a) Prepare group statement of financial position as at 30 June 2018
b) Prepare group statement of comprehensive income as at 30 June 2018
c) Prepare group statement of changes in equity as at 30 June 2018
6. Mock 3 Q1: acquire 100% / cash / capital
▪ The fair value of PPE was £150,000 for S Co on the acquisition date
Required:
a) Prepare a consolidated statement of financial position as at the close of business on
1 January 2018, assuming that the purchase consideration of £225,000 was paid in
cash
b) Prepare a consolidated statement of financial position as at the close of business on
1 January 2018, assuming that the purchase consideration of £225,000 was settled
by means of an issue of 150,000 £1 ordinary shares of P Co at a premium of 50p per
share.
7. Mock 3 Q2: Capital
▪ The fair value and book value of assets/liabilities of the S Co were identical at the time of
the acquisition and have not changed since then.
▪ The share capital of P Co and S Co have not changed since the acquisition
▪ The retained earnings of S Co were £200,000 on 1 July 2017 (acquisition date)
▪ Goodwill arising on consolidation has suffered no impairment since the acquisition
, ▪ Non-controlling interest in the statement of financial position will be measured using the
appropriate proportion of the subsidiary’s identifiable net assets
▪ Both companies prepare their financial statements on 31st of December
▪ 50% of the net profit is attributable to the second half of the year
Required:
g) Prepare group statement of financial position as at 30 September 2017
h) Prepare group retained earnings as at 30 September 2017
8. Mock 3 Q3: Cash
At the time of the acquisition S Co’s retained earnings were £10,000
Both companies’ reporting period is 31 st of December each year
Required:
Prepare the consolidated statement of financial position
