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question 1

On 1 July 2019 (DOA), Hilluison (Parent Ltd) acquired 80% of the ordinary share capital of Skeptik (Subsidiary Ltd) at a cost of $11,280,000.

Income Statement of both companies are:

Income statements: Year to 31 March 2020

	Hilluision $000	Skeptik $000
Sales Revenue	60,000	24,000
Cost of Sales	(42,000)	(20,000)
Gross Profit	18,000	4,000
Operating Expenses	(6,000)	(200)
Loan Interest Received (paid)	75	(200)
Operating Profit	12,075	3,600
Taxation	(3,000)	(600)
Profit after tax for the year	9,075	3,000
Accumulated profit brought forward	16,525	5,400
Accumulated profit per balance sheet	25,600	8,400

Statement of Financial Position as at 31 March 2020

	Hilluson	Skeptik
Tangible Non-Current Assets	19,320	8,000
Investments: Skeptic shares	11,280	Nil
	30,600	8,000
Current Asset	15,000	8,000
Total Assets	45,600	16,000
Equity and Liabilities
Ordinary Shares of $1 each	10,000	2,000
Accumulated Profits	25,600	8,400
	35,600	10,400
Non-Current Liabilities
10% Loan Notes	Nil	2,000
Current Liabilities	10,000	3,600
Total Equity and Liabilities	45,600	16,000

The following information is relevant:

Revaluation:

The fair values of Skeptiks assets were equal to their book values with the exception of its Plant which had a fair value of $3.2 million in excess of its book value at the date of acquisition. The remaining life of Skeptiks Plant at the date of acquisition was four years and this period has not changed as a result of the acquisition. Skeptik has not adjusted the value of its plant as a result of the fair value exercise

Pre & Post Acquisition profit:

Revenue and profits should be deemed to accrue evenly throughout the year.

Required:

Prepare a consolidated statement of financial position for Hilluision for the year to 31^St March 2020.

Question 2 Barbados :

DOSOFP DOA (eg 1&32, NCI (eg 3&4), Pre and Post Acquisition Reserves (eg 5&6) and Revaluation of Assets (eg7).

The Statement of Financial Position of two companies, as at 31^st December 2019, are as follows:

	Barbados $m	Bridgetown $m
Investment in Bridgetown	1,000
Assets	600	800
	1,600	800
Ordinary Shares($1)	650	100 ($100/$1= 100 shares)
Accumulated Profits	250	500:
Equity	900	600
Liabilities	700	200
	1,600	800

Additional Information:

1. Two years ago, 1^st January 2018, Barbados made an acquisition of 90 % of the shares in Bridgetown. NCI 10%
2. At the date of acquisition the plant of Bridgetown had a fair value in excess of its carrying value of $100m. This plant had a remaining life of four years .Revaluation of Assets of Bridgetown
3. At the date of acquisition, the accumulated profits were 250m.

REQUIRED:

Prepare the Consolidated Statement of Financial Position for the Barbados Group of companies

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