Question 1 Advanced Financial Accounting

Workbook 2
CJE1: Elimination of investment
Dr Share capital 600,000
Dr Retained earnings 600,000
Dr Deferred tax asset 8,000
Dr Goodwill 492,000
Cr FVOCI debt security 40,000
Cr Investment in Y Co 1,500,000
Cr Non-controlling interests 160,000
1,700,000 1,700,000

NCI's share of goodwill 43,200 160000-10%*(1160000+8000)

CJE2: Adjustment for realization of FVOCI debt security

Dr FVOCI debt securities 40,000
Cr Retained earnings 36,000
Cr Non-controlling interests 4,000

CJE3: Adjustment for tax on realization of FVOCI debt security

Dr Retained earnings 7,200
Dr Non-controlling interests 800
Cr Deferred tax asset 8,000

CJE4: Adjustment for unrealized profit on transfer of fixed assets

Reinstate to original cost and accumulated depreciation prior to transfer
Dr Gain on sale 104,000
Dr Fixed assets 40,000
Cr Accumulated depreciation 144,000
Shd be What is Adjustmt
Fixed assets, cost 240,000 200,000 40,000
Accumulated depreciation (144,000) 0 (144,000)
Net book value 96,000 200,000 (104,000)

CJE5: Adjustment for tax on unrealized profit on transfer of fixed assets

Dr Deferred tax asset 20,800
Cr Tax expense 20,800

CJE6: Adjustment of current depreciation on transferred fixed asset

Dr Accumulated depreciation 52,000
Cr Depreciation 52,000
Depreciation before transfer 48,000
Depreciation after transfer 100,000
Annual over-depreciation to be corrected (52,000) 104000/2

CJE7: Tax effects on CJE6

Dr Tax expense 10,400
Cr Deferred tax asset 10,400

CJE8: Allocate share of post-acquisition RE to NCI

Dr Opening RE 30,000
Cr NCI (BS) 30,000
RE at 1 Jan 20x6 900,000
RE at date of acquisition 600,000
Change in RE 300,000
NCI's share 30,000

CJE9: Eliminate dividends declared by Y Co

Dr Dividend income 180,000
Dr Non-controlling interests 20,000
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Question 1 Advanced Financial Accounting
Workbook 2
Cr Dividend declared 200,000

CJE10: Allocate share of current income to NCI

Dr Income to NCI 91,840
Cr NCI (BS) 91,840
NPAT of Y Co 960,000
Less Gain on sale of FA (104,000)
Add tax on gain on sale of FA 20,800
Add depreciation on gain on sale of FA 52,000
Less tax expense on gain on sale of FA (10,400)
Adjusted NPAT 918,400

CJE11: Elimination of sale from P Co to Y Co

Dr Sales 200,000
Cr Inventory 6,000
Cr Cost of Sales 194,000

CJE12: Tax effects of CJE11

Dr Deferred tax asset 1,200
Cr Tax expense 1,200

CJE13: Elimination of intercompany payable and receivable

Dr Amount due to Y Co 90,000
Cr Amount due from P Co 90,000

EA1: Recognize share of post-acquisition RE of Z

Dr Investment in Z 60,000
Cr Opening RE 60,000
RE of Z as at 1 Jan 20x6 600,000
RE of Z as at date of acquisition 400,000
Change in RE 200,000
Share of Z's change in RE 60,000

EA2: Recognize past cost of sales of overvalued inventory, after-tax

Dr Investment in Z 12,000
Cr Opening RE 12,000

EA3: Adjust unrealized profit from past transfer, after-tax

Dr Opening RE 7,680 (220000-180000)*80%*80%*30%
Cr Investment in Z 7,680

EA4: Reclassify dividend income as a reduction of investment

Dr Dividend income 27,000
Cr Investment in Z 27,000

EA5: Recognize share of current profit after tax of Z

Dr Investment in Z 156,720
Cr Share of profit of Z 156,720
OR
Dr Investment in Z 156,720
Dr Share of tax of Z 31,680
Cr Share of profit of Z 188,400

NPAT 500,000
Add realized profit from sale of inventory 22,400 28000*80%
Adjusted NPAT of Z 522,400
Share of NPAT 156,720

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Question 1 Advanced Financial Accounting
Workbook 2
Analytical check of Non-controlling Interests:
Book value of net assets as at 31 Dec 20x6 2,260,000
Adjustment for unrealized gain on FA (after-tax) (41,600)
Adjusted net assets as at 31 Dec 20x6 2,218,400
NCI's share 221,840
NCI's share of goodwill 43,200
NCI at year-end 265,040

CJE1: Elimination of investment 160,000

CJE2: Adjustment for realization of FVOCI debt security 4,000
CJE3: Adjustment for tax on realization of FVOCI debt security (800)
CJE8: Allocate share of post-acquisition RE to NCI 30,000
CJE9: Eliminate dividends declared by Y Co (20,000)
CJE10: Allocate share of current income to NCI 91,840

NCI balance as at 31 Dec 20x6 265,040

Analytical check of Investment in Z:

Book value of shareholders' equity of Z 1,410,000
Unrealized profit in inventory as at year end (3,200)
1,406,800
P's share of Z's identifiable net assets 422,040

Implicit goodwill in investment in Z:

Investment in Z 500,000
BV of net assets of Z at acq 800,000
Excess of FV over BV of inventory (after-tax) (40,000)
FV of net assets of Z at acq 760,000
Less Share of FV of net assets of Z at acq 228,000
Goodwill in Z implicit in the investment in Z 272,000
694,040

Investment in Z, at cost 500,000

EA1: Recognize share of post-acquisition RE of Z 60,000
EA2: Recognize past cost of sales of overvalued inventory, after-tax 12,000
EA3: Adjust unrealized profit from past transfer, after-tax (7,680)
EA4: Reclassify dividend income as a reduction of investment (27,000)
EA5: Recognize share of current profit after tax of Z 156,720

Investment in Z as at 31 Dec 20x6 694,040

Analytical check on consolidated retained earnings

Balance of consolidated RE: refer to consolidated worksheet below 3,734,600

Analytical check:
P's RE 2,600,000
P's share of Y's post-acquisition RE 954,000
P's share of Z's post-acquisition RE 183,000

P's share of cumulative amortization of FV-BV of Y 28,800

P's share of cumulative amortization of FV-BV of Z 12,000

P's share of unrealized profit of Y, after tax (37,440)

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Question 1 Advanced Financial Accounting
Workbook 2
P's share of unrealized profit of Z, after tax (960)
P's unrealized profit from downstream sale, after tax (4,800)

Consolidated RE 3,734,600

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Question 1 Advanced Financial Accounting
Workbook 2
Income Statement for year ended 31 December 20x6
P Co Y Co Dr Cr Total
Profit before tax 3,000,000 1,200,000 104,000 52,000 4,123,400
180,000 194,000
200,000 188,400
27,000

Tax (600,000) (240,000) 10,400 20,800 (860,080)

31,680 1,200

Profit after tax 2,400,000 960,000 3,263,320

Dividends declared (300,000) (200,000) 200,000 (300,000)

Profit retained 2,100,000 760,000 2,963,320

Income to NCI 91,840 (91,840)

Retained earnings, 1 Jan 20x6 500,000 900,000 30,000 60,000 839,120

7,200
600,000 36,000
12,000
7,680
Retained earnings, 31 Dec 20x6 2,600,000 1,660,000 1,289,800 764,400 3,710,600

Balance sheet as at 31 Dec 20x6 P Co Y Co Dr Cr Total

Fixed assets, net book value 3,000,000 1,500,000 52,000 4,448,000
40,000 144,000
Goodwill 492,000 492,000

Investment in Y Co, at cost 1,500,000 1,500,000

Investment in Z Co, at cost 500,000 60,000 694,040

156,720 27,000
12,000 7,680
Amount due from P Co 90,000 90,000 0
Amount due from Z Co 60,000 60,000
Deferred tax 20,800 10,400 11,600
8,000 8,000
1,200
Inventory 800,000 600,000 6,000 1,394,000
FVOCI debt 40,000 40,000
Accounts receivable 520,000 200,000 720,000
Cash 100,000 50,000 150,000
6,480,000 2,440,000 882,720 1,833,080 7,969,640

Accounts payable 1,790,000 180,000 1,970,000

Amount due to Y Co 90,000 90,000 0
Share capital 2,000,000 600,000 600,000 2,000,000
Retained earnings 2,600,000 1,660,000 1,289,800 764,400 3,734,600

Non-controlling interests 160,000 265,040

800 4,000
20,000 30,000
91,840
6,480,000 2,440,000 2,000,600 1,050,240 7,969,640
2,883,320 2,883,320 0

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 Question 2 Advanced Financial Accounting
Workbook 2

Part (a): Consolidation and equity accounting entries for 20x6

CJE1: Elimination of investment in X Co

Dr Share capital 600,000
Dr Retained earnings 600,000
Dr Fixed assets 400,000
Dr Goodwill 460,000
Cr Deferred tax liability 80,000
Cr Investment in X 1,800,000
Cr Non-controlling interests 180,000
2,060,000 2,060,000

CJE2: Past accumulated depreciation to opening RE (20x3,20x4,20x5) and current disposal

Dr Opening RE 108,000 400000/10*3*0.9
Dr Non-controlling interests 12,000 400000/10*3*0.1
Dr Loss on sale 280,000
Cr Fixed assets 400,000

CJE3: Tax effects of CJE2

Dr Deferred tax liability 80,000
Cr Opening RE 21,600
Cr Non-controlling interests 2,400
Cr Tax expense 56,000

CJE4: Adjustment for unrealized profit on transfer of fixed assets

Reinstate to original cost and accumulated depreciation prior to transfer
Dr Profit on sale 15,000
Dr Fixed assets 15,000
Cr Accumulated depreciation 30,000
Shd be What is Adjustmt
Fixed assets, cost 50,000 35,000 15,000
Accumulated depreciation (30,000) 0 (30,000)
Net book value 20,000 35,000 (15,000)

CJE5: Adjustment for tax on unrealized profit on transfer of fixed assets

Dr Deferred tax asset 3,000
Cr Tax expense 3,000 20%*15000

CJE6: Adjustment of current depreciation of transferred fixed asset

Dr Accumulated depreciation 5,000
Cr Depreciation 5,000
Depreciation before transfer 6,667
Depreciation after transfer 11,667
Annual over-depreciation to be corrected (20x6) (5,000) =15000/3

CJE7: Tax effects on CJE6

Dr Tax expense 1,000
Cr Deferred tax asset 1,000

CJE8: Allocate share of post-acquisition RE to NCI

Dr Opening RE 20,000
Cr NCI (BS) 20,000
RE at 1 Jan 20x6 800,000
RE at date of acquisition 600,000
Change in RE 200,000
NCI's share 20,000

CJE9: Eliminate dividends declared by X Co

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 Question 2 Advanced Financial Accounting
Workbook 2

Dr Dividend income 90,000

Dr Non-controlling interests 10,000
Cr Dividend declared 100,000

CJE10: Eliminate downstream sale (no reversal of impairment loss)

Dr Sales 100,000
Cr Cost of sales 100,000

CJE11: Allocate share of current income to NCI

Dr Income to NCI 168,800
Cr NCI (BS) 168,800
NPAT of X Co 1,920,000
Less adjustment to profit on sale on under-valued fixed assets (280,000)
Add tax on profit on sale on under-valued fixed assets 56,000
Less profit on transfer of fixed assets (15,000)
Add tax on profit on transfer of fixed assets 3,000
Add correction of excess depreciation 5,000
Less tax on excess depreciation (1,000)
Adjusted NPAT 1,688,000

Part (b): Analytical check of Non-controlling interests :

Book value of net assets as at 31 Dec 20x6 3,220,000
Adjustment for unrealized profit on fixed assets (8,000) 15000/3*2*0.8
Adjusted net assets as at 31 Dec 20x5 3,212,000
NCI's share of net assets 321,200
NCI's share of goodwill 28,000 180000-10%*(1600000-80000)
NCI balance as at 31 Dec 20x6 349,200

CJE1: NCI at date of acquisition 180,000

CJE2: Adjustment for depreciation on under-valued FA (12,000)
CJE3: Tax effects of CJE2 2,400
CJE8: Share of post-acq RE 20,000
CJE9: Dividends received (10,000)
CJE11: Allocate share of current income to NCI 168,800
NCI balance as at 31 Dec 20x6 349,200

EA1: Recognize share of post-acquisition RE of Z

Dr Investment in Z 30,000
Cr Opening RE 30,000

RE of Z as at 1 Jan 20x5 500,000

RE of Z as at date of acquisition 400,000
Change in RE 100,000
Share of Z's change in RE 30,000

EA2: Reclassify dividend income as a reduction of investment

Dr Dividend income 18,000
Cr Investment in Z 18,000 (30%*60000)

EA3: Recognize share of current profit after tax of Z

Dr Investment in Z 139,920
Cr Share of profit of Z 139,920
OR
Dr Investment in Z 139,920
Dr Share of tax of Z 57,480
Cr Share of profit of Z 197,400

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 Question 2 Advanced Financial Accounting
Workbook 2

Profit after tax of Z 500,000

Less impairment of intangible, after tax 20%*150000*80% (24,000)
Less unrealized profit from 20x6, after tax 20%*60000*80% (9,600)
Adjusted profit after tax of Z 466,400
Share of adjusted profit after tax of Z 139,920

Part (b): Analytical check of Investment in Z:

Book value of shareholders' equity of Z 1,240,000

Adjustment to RE for unrealized profit at year-end (after-tax) (9,600) 60000*20%*80%

Unimpaired balance of intangible asset (after-tax) 96,000 150000*80%*80%

1,326,400

P's share of Z's identifiable net assets 397,920

Implicit goodwill in investment in Z:

Investment in Z 400,000
BV of net assets of Z at acq 700,000
Unrecognized intangible asset (after-tax) 120,000
FV of net assets of Z at acq 820,000
Less Share of FV of net assets of Z at acq 246,000
Goodwill in Z implicit in the investment in Z 154,000
551,920

Investment in Z, at cost 400,000

EA1: Recognize share of post-acquisition RE of Z 30,000
EA2: Reclassify dividend income as a reduction of investment (18,000)
EA3: Recognize share of current profit after tax of Z 139,920
Investment in Z as at 31 Dec 20x6 551,920 0

Analytical check on consolidated retained earnings as at 31 December 20x6

Listing's approach (not the check):

P's RE 4,660,000
X's RE 2,620,000
CJE1: Elimination of investment in X Co (600,000)
CJE2: Expensing of FV-BV in Y Co (388,000)
CJE3: Tax effects of CJE2 77,600
CJE4: Unrealized profit in fixed asset transfer (15,000)
CJE5: Tax effects on CJE4 3,000
CJE6: Current depreciation on fixed asset transfer 5,000
CJE7: Tax effects on CJE6 (1,000)
CJE8: Post-acquisition RE to NCI (20,000)
CJE9: Eliminate dividends declared by X Co 10,000
CJE11: Allocate share of current income to NCI (168,800)
EA1: Recognize share of post-acquisition RE of Z 30,000
EA2: Dividend income (18,000)
EA3: Share of current profit of Z 139,920

Consolidated RE as at 31 Dec 20x6 6,334,720

Analytical check:
P's RE 4,660,000
P's share of post-acquisition RE of X 1,818,000
P's share of post-acquisition RE of Z 162,000

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 Question 2 Advanced Financial Accounting
Workbook 2

P's share of cumulative amortization of FV-BV of X (288,000)

P's share of cumulative amortization of FV-BV of Y (7,200)

P's share of unrealized profit of X, after tax (7,200)

P's share of unrealized profit of Y, after tax (2,880)

6,334,720

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Question 3 Advanced Financial Accounting
Workbook 2
CJE1: Elimination of investment
Dr Share capital 900,000
Dr Retained earnings 300,000
Dr Deferred tax asset 40,000
Dr Goodwill 880,000
Cr Provision for loss 200,000
Cr Investment in Y Co 1,800,000
Cr Non-controlling interests 120,000
2,120,000 2,120,000

NCI's share of goodwill 120000-10%*(1000000+40000) 16,000

CJE2: Adjustment for provision for loss

Dr Provision for loss 200,000
Cr Retained earnings 180,000
Cr Non-controlling interests 20,000

CJE3: Adjustment for tax on provision for loss

Dr Retained earnings 36,000
Dr Non-controlling interests 4,000
Cr Deferred tax asset 40,000

CJE4: Adjustment for unrealized profit on transfer of fixed assets

Reinstate to original cost and accumulated depreciation prior to transfer
Dr Gain on sale 150,000
Dr Fixed assets 100,000
Cr Accumulated depreciation 250,000

Shd be What is Adjustmt

Fixed assets, cost 500,000 400,000 100,000
Accumulated depreciation (250,000) 0 (250,000)
Net book value 250,000 400,000 (150,000)

CJE5: tax effects on CJE4

Dr Deferred tax asset 30,000
Cr Tax expense 30,000

CJE6: Adjustment of first half year depreciation on transferred fixed asset

Dr Accumulated depreciation 37,500
Cr Depreciation 37,500
Depreciation before transfer 62,500
Depreciation after transfer 100,000
Half-year over-depreciation to be corrected (37,500)

CJE7: Tax effects on CJE6

Dr Tax expense 7,500
Cr Deferred tax asset 7,500

CJE8: Adjustment of profit on sale

Dr Accumulated depreciation 85,000 (250000-37500)*40%
Cr Fixed asset 40,000 40%*100000
Cr Profit on sale 45,000

What is What should be Difference

Sales price 140,000 140,000
Net book value (120,000) (75,000)
Profit on sale 20,000 65,000 45,000

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Question 3 Advanced Financial Accounting
Workbook 2
CJE9: Tax on CJE8
Dr Tax expense 9,000
Cr Deferred tax asset 9,000

CJE10: Adjustment of excess depreciation in second half 20x6

Dr Accumulated depreciation 22,500 60%*37500 Refer CJE6 for calculation
Cr Depreciation 22,500

CJE11: Tax effects of CJE10

Dr Tax expense 4,500
Cr Deferred tax asset 4,500

CJE12: Allocate share of post-acquisition RE to NCI

Dr Opening RE 50,000
Cr NCI (BS) 50,000
RE at 1 Jan 20x6 800,000
RE at date of acquisition 300,000
Change in RE 500,000
NCI's share 50,000

CJE13: Eliminate dividends declared by Y Co

Dr Dividend income 108,000
Dr Non-controlling interests 12,000
Cr Dividend declared 120,000

CJE14: Allocate share of current income to NCI

Dr Income to NCI 156,400
Cr NCI (BS) 156,400
NPAT of Y Co 1,600,000
Less Gain on sale of FA, after tax (120,000)
Add depreciation for first half, after tax 30,000
Adjustment of profit on sale of FA, after tax 36,000
Add depreciation for second half, after tax 18,000
Adjusted NPAT 1,564,000

CJE15: Elimination of sale from P Co to Y Co

Dr Sales 300,000
Cr Inventory 15,000
Cr Cost of Sales 285,000

CJE16: Tax effects of CJE15

Dr Deferred tax asset 3,000
Cr Tax expense 3,000

CJE17: Elimination of intercompany payable and receivable

Dr Amount due to Y Co 90,000
Cr Amount due from P Co 90,000

EA1: Recognize share of post-acquisition RE of Z

Dr Investment in Z 90,000
Cr Opening RE 90,000
RE of Z as at 1 Jan 20x6 500,000
RE of Z as at date of acquisition 200,000
Change in RE 300,000
Share of Z's change in RE 90,000

EA2: Recognize past cost of sales of undervalued inventory, after-tax

Dr Opening RE 24,000
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Question 3 Advanced Financial Accounting
Workbook 2
Cr Investment in Z 24,000

EA3: Adjust unrealized profit from past transfer, after-tax

Dr Opening RE (300000-220000)*80%*40%*3 7,680
Cr Investment in Z 7,680

EA4: Reclassify dividend income as a reduction of investment

Dr Dividend income 15,000
Cr Investment in Z 15,000

EA5: Recognize share of current profit after tax of Z

Dr Investment in Z 259,800
Cr Share of profit of Z 259,800
OR
Dr Investment in Z 259,800
Dr Share of tax of Z 46,200
Cr Share of profit of Z 306,000

NPAT 850,000
Add realized profit from sale of inventory, after tax 16,000 80%*25%*80000
Adjusted NPAT of Z 866,000
Share of adjusted NPAT of Z 259,800

Analytical check of Non-controlling Interests:

Book value of net assets as at 31 Dec 20x6 3,180,000
Unrealized profit from fixed asset transfer, after-tax at 31 Dec 20x6 (36,000) 80%*60%*1/2*150000
3,144,000
NCI's share 314,400
NCI's share of goodwill 16,000
NCI at year-end 330,400

CJE1: Elimination of investment 120,000

CJE2: Adjustment for provision for loss 20,000
CJE3: Adjustment for tax on provision for loss (4,000)
CJE12: Allocate share of post-acquisition RE to NCI 50,000
CJE13: Eliminate dividends declared by Y Co (12,000)
CJE14: Allocate share of current income to NCI 156,400

NCI balance as at 31 Dec 20x6 330,400 0

Analytical check of Investment in Z:

Book value of shareholders' equity of Z 1,900,000
Unrealized profit in inventory as at year end 15%*80000*80% (9,600)
1,890,400
P's share of Z's identifiable net assets 567,120

Implicit goodwill in investment in Z:

Investment in Z 600,000
BV of net assets of Z at acq 800,000
Excess of FV over BV of inventory (after-tax) 80,000
FV of net assets of Z at acq 880,000
Less Share of FV of net assets of Z at acq 264,000
Goodwill in Z implicit in the investment in Z 336,000
903,120

Investment in Z, at cost 600,000

EA1: Recognize share of post-acquisition RE of Z 90,000
EA2: Recognize past cost of sales of undervalued inventory, after-tax (24,000)
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Question 3 Advanced Financial Accounting
Workbook 2
EA3: Adjust unrealized profit from past transfer, after-tax (7,680)
EA4: Reclassify dividend income as a reduction of investment (15,000)
EA5: Recognize share of current profit after tax of Z 259,800
Investment in Z as at 31 Dec 20x6 903,120
Listings of consolidated RE entries:
P's RE 4,900,000
Y's RE 2,280,000
CJE1: Elimination of investment (300,000)
CJE2: Adjustment for provision for loss 180,000
CJE3: Adjustment for tax on provision for loss (36,000)
CJE4:Unrealized profit on fixed assets (150,000)
CJE5: Tax effects on CJE4 30,000
CJE6: Excess depreciation for first half 20x6 37,500
CJE7: Tax effects on CJE6 (7,500)
CJE8: Adjustment of profit on sale 45,000
CJE9: Tax on CJE8 (9,000)
CJE10: Excess depreciation for second half 20x6 22,500
CJE11: Tax effects of CJE10 (4,500)
CJE12: Allocate post-acquisition RE to NCI (50,000)
CJE13: Eliminate dividends declared by Y Co 12,000
CJE14: Allocate share of current income to NCI (156,400)
CJE15: Elimination of sale from P Co to Y Co (15,000)
CJE16: Tax effects of CJE15 3,000
EA1: Share of post-acquisition RE of Z 90,000
EA2: Past cost of sales, after tax (24,000)
EA3: Unrealized profit, after tax (7,680)
EA4: Reclassify dividend income (15,000)
EA5: Share of current profit after tax of Z 259,800
7,084,720

Analytical check:
P's RE 4,900,000
P's share of Y's post-acquisition RE 1,782,000 90%*(2280000-300000)
P's share of Z's post-acquisition RE 330,000 30%*(1300000-200000)

P's share of cumulative amortization of FV-BV of Y 144,000 90%*80%*200000

P's share of cumulative amortization of FV-BV of Z (24,000) 30%*80%*100000

P's share of unrealized profit of Y, after tax (32,400) 90%*80%*60%*1/2*150000

P's share of unrealized profit of Z, after tax (2,880) 30%*9600
P's unrealized profit from downstream sale, after tax (12,000) 80%*15000

Consolidated RE 7,084,720 0

Consolidated worksheet (not required)

P Co Y Co Dr Cr Total
Profit before tax 5,000,000 2,000,000 150,000 37,500 7,076,800
108,000 285,000
300,000 259,800
15,000 45,000
22,500

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Question 3 Advanced Financial Accounting
Workbook 2

Tax (1,000,000) (400,000) 7,500 30,000 (1,388,000)

4,500 3,000
9,000
Profit after tax 4,000,000 1,600,000 5,688,800

Dividends declared (300,000) (120,000) 120,000 (300,000)

Profit retained 3,700,000 1,480,000 5,388,800

Income to NCI 156,400 (156,400)

Retained earnings, 1 Jan 20x6 1,200,000 800,000 50,000 90,000 1,852,320

36,000
300,000 180,000
24,000
7,680
Retained earnings, 31 Dec 20x6 4,900,000 2,280,000 1,168,080 1,072,800 7,084,720
0
Balance sheet as at 31 Dec 20x6 P Co Y Co Dr Cr Total
Fixed assets, net book value 3,500,000 2,500,000 37,500 5,955,000
100,000 250,000
45,000
22,500

Goodwill 880,000 880,000

Investment in Y Co, at cost 1,800,000 1,800,000

Investment in Z Co, at cost 600,000 90,000 7,680 903,120

259,800 15,000
24,000
Amount due from P Co 90,000 90,000 0
Amount due from Z Co 60,000 60,000
Deferred tax 30,000 7,500 12,000
40,000 40,000
3,000 9,000
4,500

Inventory 800,000 600,000 15,000 1,385,000

Accounts receivable 520,000 200,000 720,000
Cash 100,000 50,000 150,000
7,380,000 3,440,000 1,507,800 2,262,680 10,065,120

Provision for loss 200,000 200,000

Accounts payable 390,000 260,000 650,000
Amount due to Y Co 90,000 90,000 0
Share capital 2,000,000 900,000 900,000 2,000,000
Retained earnings 4,900,000 2,280,000 1,168,080 1,072,800 7,084,720

Non-controlling interests 120,000 330,400

4,000 20,000
12,000 50,000
156,400
7,380,000 3,440,000 2,174,080 1,419,200 10,065,120
3,681,880 3,681,880 0

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