On 1 April 20X5 Hardy entity acquired 4 million of #4695

On 1 April 20X5 Hardy entity acquired 4 million of Sibling entity's ordinary shares paying €4.50
each. At the same time it also purchased at nominal value €500 000 of its 10% preference
shares. At the date of acquisition the retained profit reserves of Sibling entity were €8 400 000.
The draft statements of financial position of the two entities at 31 March 20X8 were as
follows:Extracts from the statement of comprehensive income of Sibling entity before intra-group
adjustments, for the year to 31 March 20X8 are: €000Profit before tax ..................... 5
400Taxation .............................. (1 600) 3 800The following information is relevant:• Included in
the land and buildings of Sibling is a large area of developed land at its cost of €5 million. Its fair
value at the date Sibling was acquired was €7 million and by 31 March 20X8 this had risen to
€8.5 million. The group valuation policy for development land is that it should be carried at fair
value and not depreciated.• Also at the date of Sibling's acquisition the plant and equipment
included plant that had a fair value of €4 million in excess of its carrying value. This plant had a
remaining life of five years. The group calculates depreciation on a straight line basis. The fair
value of Sibling's other net assets approximated to their carrying values.• During the year
Sibling sold goods to Hardy for €1.8 million. Sibling adds a 20% mark-up on cost to all its sales.
Goods with a transfer price of €450 000 were included in Hardy's stock at 31 March 20X8. The
balance on the current accounts of the parent and subsidiary was €240 000 on 31 March
20X8.Prepare the consolidated statement of financial position of Hardy as at 31 March
20X8.View Solution:
On 1 April 20X5 Hardy entity acquired 4 million of

ANSWER
http://paperinstant.com/downloads/on-1-april-20x5-hardy-entity-acquired-4-million-of/

1/1
Powered by TCPDF (www.tcpdf.org)