H Limited, a quoted company at the securities exchange, acquired 80% of the equity shares of P Limited ten years ago. On 1 April 2014, H...

      

H Limited, a quoted company at the securities exchange, acquired 80% of the equity shares of P Limited ten years ago.
On 1 April 2014, H Limited disposed of half of its investment in P Limited and acquired 80% of the equity shares of R Limited.
Below are the financial statements of the three companies for the year ended 30 September 2014.

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Additional information:
1. On 1 April 2014, H Limited disposed of half of its investment in P Limited for Sh.4, 500 million. This disposal has already been accounted for by H Limited but not by the group. The fair value of the remaining investment in P Limited was Sh.3, 900 million on the date of disposal.
2. H Limited had acquired its shareholding in P Limited for Sh. 7,200 million when the retained profit of P Limited amounted to Sh.4, 500 million.
There was no fair value adjustment at the time of this acquisition. Assume that the profits of P Limited accrued evenly during the year.
3. Intercompany receivables and payables were as follows as at 30 September 2014:
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4. As at 1 October 2013 half of the goodwill of P Limited had been impaired. The goodwill of the companies were not impaired in the current year to 30 September 2014. The group uses the partial goodwill method when preparing the consolidated financial statements.
5. Between 1 April 2014 and 30 September 2014, H Limited sold to R Limited goods worth Sh.1, 200 million at a profit of Sh.300 million. 50% of the goods were still in the inventory of R Limited as at 30 September 2014.

Required:
a) Group income statement for the year ended 30 September 2014.
b) Group statement of financial position as at 30 September 2014.

  

Answers


Martin
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marto answered the question on February 13, 2019 at 08:53


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