- 20 Marks
FR – Nov 2019 – L2 – Q3 – Consolidated Financial Statements (IFRS 10)
Prepare a consolidated statement of financial position for Family Plc as of September 30, 2019, including the calculation of goodwill, unrealised profit, and non-controlling interests.
Question
Family Plc. is the parent company of Children Limited. The statements of financial position of the two companies as at September 30, 2019, are presented below:
Statement of Financial Position as at September 30, 2019
| Assets | Family Plc | Children Ltd |
|---|---|---|
| Office building complex | 5,000 | 1,920 |
| Plant and machinery | 7,000 | 6,000 |
| Investment in Children Ltd shares | 6,028 | – |
| Total Non-current Assets | 18,028 | 7,920 |
| Current Assets | ||
| Inventory | 3,600 | 1,900 |
| Trade receivables | 4,100 | 1,700 |
| Other receivables | 300 | 20 |
| Tax assets | 0 | 100 |
| Bank balances | 1,440 | 840 |
| Total Current Assets | 9,440 | 4,560 |
| Total Assets | 27,468 | 12,480 |
| Equity and Liabilities | Family Plc | Children Ltd |
|---|---|---|
| Ordinary shares of N1.50 each | 21,600 | 9,600 |
| Retained earnings | 1,260 | 480 |
| Total Equity | 22,860 | 10,080 |
| Current Liabilities | ||
| Trade payables | 2,000 | 280 |
| Other payables | 928 | 200 |
| Overdrafts | 1,680 | 1,920 |
| Total Current Liabilities | 4,608 | 2,400 |
| Total Equity and Liabilities | 27,468 | 12,480 |
Additional Information:
- Family Plc acquired 4.8 billion shares in Children Limited a year ago when Children Limited had retained earnings of N144 million, and the fair value of the non-controlling interest was N3.396 billion. Profits were evenly distributed over the years.
- During the year ended September 30, 2019, Family Plc sold goods with an invoiced value of N576 million at cost plus 20% to Children Limited. Half of the goods were still in Children Limited’s inventory as at the end of the year.
- Children Limited owed Family Plc N72 million for goods purchased during the year.
- Included in the other payables is the proposed dividend of 2.5 kobo per share for Children Limited for the year ended September 30, 2019. Both companies agreed that the proposed dividend should be paid by the directors of Children Limited before consolidation.
Required:
Prepare the Consolidated Statement of Financial Position for Family Plc as at September 30, 2019.
(20 Marks)
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