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Q10.1 - Oxford LTD - Cambridge LTD - SOL

The document provides consolidated financial statements for Oxford Limited and its subsidiary for the year ended 31 December 20.8. It includes a consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity, and notes. The consolidated statements show the parent company's and non-controlling interests' shares of profit, comprehensive income, and equity balances.

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122 views2 pages

Q10.1 - Oxford LTD - Cambridge LTD - SOL

The document provides consolidated financial statements for Oxford Limited and its subsidiary for the year ended 31 December 20.8. It includes a consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity, and notes. The consolidated statements show the parent company's and non-controlling interests' shares of profit, comprehensive income, and equity balances.

Uploaded by

nessamuchena
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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QUESTION 10:1 SUGGESTED SOLUTIONS

Oxford Limited and its Subsidiary


Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended
31 December 20.8
R
Sales 375 000
Cost of sales plus operating expenses (225 000)
Operating profit 150 000
Dividend income (55 200 – 14 400 – 16 800) 24 000
Profit on expropriation of land (10 000(1) + 14 000(2)) 24 000
Profit before taxation 198 000
Taxation (55 000 + 20 000 – 1 600) (73 400)
Profit after taxation 124 600
Other comprehensive income:
Items that will not be reclassified into profit and loss:
Fair value adjustment to financial assets – net of tax (2 500 – 960(5)) 1 540
Total comprehensive income for the year 126 140

Profit attributable to:


Non-controlling interests 9 120
Parent equity shareholders 115 480
124 600
Total comprehensive income attributable to:
Non-controlling interests 9 120
Parent equity shareholders 117 020
126 140

Consolidated Statement of Changes in Equity


for the year ended 31 December 20.8 (Extracts)

Share Fair Retained Total Non- Total


Capital Value Earnings Parent controlling Equity
Reserve Equity Interests
R R R R R R
Balances 1 January 20.8 ? ? 110 000 ? - ?
Acquisition of subsidiary 12 800 ?
Total comprehensive income
for the year ? 1 540 115 480 ? 9 120 126 140
Dividends paid ? (40 200) ? (7 800) ?
Balances 31 December 20.8 ? ? 185 280 ? 14 120 ?

Notes to statement of profit or loss and other comprehensive income:


5. Material items: 20 480
Profit on expropriation of Land (11 600 (1) + 14 000(2)) 25 600
Less: Attributable to Non-controlling interests in subsidiary (2 320 + 2 800) (5 120)

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QUESTION 10:1 SUGGESTED SOLUTIONS

Workings:

Worksheet – Cambridge Limited

Equity of Cambridge
S Cap RE Land DT Total NCI Inv RE
No 1
1.1.20.8 Purchase 1 600 56 000 8 000 (1) (1 600) 64 000 12 800 51 200
31.12.20.8 Profit 52 000 (8 000) 1 600 45 600 9 120 36 480
1.7.20.8 Dividend (1/7) (18 000) (18 000) (3 600) (14 400)
31.12.20.8 Dividend (31/12) (21 000) (21 000) (4 200) (16 800)
1 600 69 000 – – 70 600 14 120 51 200 5 280

(1)
(51 200 × 100/80) – 1 600 – 56 000 = 6 400 [Adjustment net of tax]
 6 400 × 100/80 [CGT rate] = 8 000 Gross adjustment to Land No 1
S Ltd Group
(2)
Proceeds 30 000 30 000
CA (12 000) (20 000)
18 000 10 000
(3)
Proceeds 34 000 34 000
CA (20 000) (20 000)
Profit 14 000 14 000
(4)
Profit: 52 000 – 18 000 – 14 000 = 20 000
(5)
Fair value adjustment to investment 1 200
Carrying amount – 1.1.20.8 51 200
– 31.12.20.8 52 400

Pro forma adjusting journal entry:


DR CR
Fair value adjustment (OCI) – net of tax 960
Deferred tax (SOFP) 240
Investment in Cambridge Limited 1 200
_____________________________

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