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  • Answer 30 Bridge January 2021

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    skye S
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    1) Bridge plc acquired controlling interests in Waterloo and Southbank in Q1 2021. Goodwill of £1,345,000 arose on the Waterloo acquisition and £230,000 on the Southbank acquisition. 2) Bridge also has a 40% interest in an associate company which it acquired for £2,400,000. After adjusting for post-acquisition reserves and an impairment, the carrying value is £2,520,000. 3) Consolidated reserves for Bridge plc as of December 31, 2020 are £9,238,000 after various consolidation adjustments.

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    1) Bridge plc acquired controlling interests in Waterloo and Southbank in Q1 2021. Goodwill of £1,345,000 arose on the Waterloo acquisition and £230,000 on the Southbank acquisition. 2) Bridge also has a 40% interest in an associate company which it acquired for £2,400,000. After adjusting for post-acquisition reserves and an impairment, the carrying value is £2,520,000. 3) Consolidated reserves for Bridge plc as of December 31, 2020 are £9,238,000 after various consolidation adjustments.

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    Answer 30 Bridge January 2021

    Uploaded by

    skye S
    1) Bridge plc acquired controlling interests in Waterloo and Southbank in Q1 2021. Goodwill of £1,345,000 arose on the Waterloo acquisition and £230,000 on the Southbank acquisition. 2) Bridge also has a 40% interest in an associate company which it acquired for £2,400,000. After adjusting for post-acquisition reserves and an impairment, the carrying value is £2,520,000. 3) Consolidated reserves for Bridge plc as of December 31, 2020 are £9,238,000 after various consolidation adjustments.

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    of 2

    30.

    Bridge plc January 2021 q1

    Unrealised profit 25/125 x 525=105 /3 =35

    Goodwill Calculation
    In controlling NCI
    interest
    £’000 £’000
    Consideration 7,000 4,000

    Share Capital 1,500


    Share Premium 500
    Pre- acquisition Retained 7600-775(3/12 3100) 6,825
    earnings
    Revaluation 600
    9,425
    60%/40% 5,655 3,770
    Goodwill 1,345 230
    Total 1,575 4 2
    marks marks

    Investment in associate £’000


    Cost 2,400
    Share of post acq. reserves 40%435(3/12 1740) 174
    Impairment (54)
    2,520
    3 marks
    Non-controlling interest £’000
    Share capital 1,500
    Share Premium 500
    Reserves 7,600
    Revaluation 600
    Depreciation (20)
    10,180
    40% 4072
    Plus goodwill 230 4302
    3 mark

    Consolidated Reserves £’000


    Bridge plc 8,700
    Waterloo post acquisition reserves 60% 775(3/12 3100) 465
    Southbank 40% (1740x 3/12) 174
    Impairment (54)
    Additional depreciation 60%(20) (12)
    Unrealised profit (35)
    9,238

    4 marks
    Bridge plc
    Consolidated Statement of Financial Position as at 31 December 2020

    Non-current assets £’000 £’000


    Tangible assets
    Property Plant & Equipment 10,880
    (6300+4000+600-20)
    Goodwill 1,575
    Investment in Associate 2,520
    14,975
    Current assets
    Inventories (16250+6950-35) 23,165
    Receivables (18350+6850-80) 25,120
    Bank (7750+20) 7,770 56,055
    71,030
    Equity and liabilities
    Share capital (£1 shares) 30,000
    Share premium 6,500
    Retained Earnings 9,238
    non-controlling interest 4,302
    50,040
    Current liabilities
    Trade payables (11450+4150-60) 15,540
    Taxation (800+600) 1,400
    Bank overdraft (600+3450) 4,050 20,990
    71,030
    9 marks

    Total Question 1 25 marks

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