60.1K

Verified Solution

Link Copied!

Horsefield, a public company, acquired 90% of Sandfly's $1 ordinary shares on 1 April 20x0 paying $3.00 per share. The balance on Sandfly's retained earnings at this date was $800,000. On 1 elow: Tre iunuwng mummatiun is reievant? (a) Fair value adjustments: On 1 April 200 Sandfly owned an investment property that had a fair value of $120,000 in excess of its book value. The value of this property has not changed since acquisition. Just prior to its acquisition, Sandfly was successful in applying for a six-year licence to dispose of hazardous waste. The licence was granted by the government at no cost, however Horsefield estimated that the licence was worth $180,000 at the date of acquisition. (b) In January 202 Horsefield sold goods to Anthill for $65,000. These were transferred at a mark-up of 30% on cost. Two thirds of these goods were still in the inventory of Anthill at 31 March 202. (c) To facilitate the consolidation procedures the group insists that all inter-company current account balances are settled prior to the year-end. However a cheque for $40,000 from Sandfly to Horsefield was not received until early April 20X2. Inter-company balances are included in accounts receivable and payable as appropriate. (d) Anthill is to be treated as an associated company of Horsefield. (e) The directors of Horsefield and Sandfly declared the proposed dividends on 20 March 202. (f) Horsefield has not accounted for any of Sandfly's proposed dividend. Required: Prepare the consolidated statement of financial position for the Horsefield Group as at 31 March 202

Answer & Explanation Solved by verified expert

See Answer