ACT 2311 Share Capital

Exercises- Consolidated Financial Statements - Ordinary Shares (Rs.1/-

30,000 15,000
each)
Question 01
Retained Earnings 15,600 7,300
P Ltd acquired 9,000,000 Ordinary shares of S Ltd on 1 st
January 2017 by paying Rs. 14Mn immediately. The Non-current Liabilities
financial statements as at 31 December 2017 are given Term Loan 8,100 4,700
below.
Current Liabilities
The Statements of Comprehensive Income for the year Dividend Payable - 1,500
ended 31 December 2017
Trade Payables 3,700 2,200
P Ltd S Ltd Total Equity & Liabilities 57,400 30,700

Rs. '000 Rs. '000

Additional Information (All figures in Rs.’000):
Revenue 75,000 48,000
1. Non-Controlling Interest (NCI) at the acquisition is
Cost of Sales (42,000) (29,500)
valued at its proportion of net assets.
Gross Profit 33,000 18,500
2. During the year, S Ltd Ltd sold goods to P Ltd at a value
Other Income 4,600 3,800
of Rs. 15,000, by keeping a profit mark-up of 20% on
Administrative Expense (10,200) (7,600) cost. By the year end, P Ltd had 40% of such goods
remained unsold.
Finance Expense (6,400) (3,500)

Profit Before Tax 21,000 11,200 3. On 01st July 2017, P Ltd sold a Factory Machine to S
Ltd at a price of Rs. 6,500. This machine has been
Tax Expense (4,800) (4,000) purchased by P Ltd on 1st January 2014 at Rs. 12,000.
Profit for the year 16,200 7,200 The group companies depreciate its factory machines
over 6 year period.
Dividend Expenses (4,500) (3,000)
Retained Profit for the 4. P Ltd declared and paid Rs. 4,500 dividends to equity
11,700 4,200
year shareholders during the year. S Ltd declared Rs. 3,000
The Statements of Financial Position of dividends to all of its’ Ordinary shareholders in this
As at 31 December 2017 year and half of it is not yet paid out, which is recorded
in its’ books as the dividends payables. P Ltd has
P Ltd S Ltd recognized the dividend amount received as other
income.
Rs. '000 Rs. '000
Assets 5. At the year-end, goodwill has been impaired by Rs. 500.
Non Current Assets
You are required to prepare,
Property Plant and
20,400 15,200
Equipment a) The Consolidated Statement of Financial Position as at
Investment in Dimo 14,000 - 31 December 2017
b) The Consolidated Statement of Comprehensive Income
Current Assets
for the year ended 31 December 2017
Inventory 7,500 5,400
Trade Receivables 3,800 2,600
Other Receivables 2,500 2,000
Cash and equivalents 9,200 5,500
Total Assets 57,400 30,700
Equity and Liability
Equity
Question 02 (Equity share of Rs.1/-
each)
Beeta Ltd acquired 80% of the Ordinary shares of Teeta Ltd Revaluation Reserve 1,100 800
on 1st January 2017 by paying cash immediately. The
financial statements as at 31 December 2017 are given Retained Earnings 12,400 5,200
below.
Non-Current Liabilities
The Statements of Comprehensive Income for the year Term Loan 11,300 4,800
ended 31 December 2017
Current Liabilities
Beeta Teeta Dividend Payable - 2,000

Rs. '000 Rs. '000 Trade Payables 4,200 1,200

Revenue 53,000 32,500 49,000 22,000

Cost of Sales (29,000) (19,400) Additional Information is given below (All figures are
Gross Profit 24,000 13,100 Rs.’000).
Other Income 7,500 5,100 1. Non-Controlling Interest (NCI) at the acquisition is
valued at its proportion of net assets.
Administrative Expense (8,600) (6,500)
Finance Expense (4,400) (2,500) 2. During the year, Teeta Ltd sold goods to Beeta Ltd at a
value of Rs. 5,000, by keeping a profit margin of 20% on
Profit Before Tax 18,500 9,200 selling price. By the year end, Beeta Ltd had sold out
70% of such goods.
Tax Expense (5,200) (4,000)
Profit for the year 13,300 5,200 3. The office buildings of Beeta Ltd were revalued at the
year-end making a gain of Rs. 300. The same assets had a
(7,300) (2,000) revaluation loss of Rs. 100 in previous year. No
Dividend Expenses
revaluation gains/ losses were resulted for Teeta Ltd for
6,000 3,200 the year.
Retained Profit for the year
4. Teeta Ltd declared Rs. 2,000 of dividends to all of its’
Ordinary shareholders in this year and it is not yet paid
The Statements of Financial Position out which is recorded in its’ books as the dividends
As at 31 December 2017 payables. Beeta Ltd has not accounted with regard to this.
Beeta Teeta
You are required to prepare,
Rs. '000 Rs. '000 a) The Consolidated Statement of Financial Position as at
31 December 2017
Assets b) The Consolidated Statement of Comprehensive Income
Non-Current Assets for the year ended 31 December 2017
Property Plant and
16,200 11,300
Equipment
Investment in Teeta 11,000
Current Assets
Inventory 6,200 2,300
Trade Receivables 4,000 2,400
Other Receivables 3,000 2,800
Cash and equivalents 8,600 3,200
49,000 22,000
Equity and Liability
Equity
Share Capital
- Ordinary Shares 20,000 8,000
Question 03 Retained Earnings 46,500 21,900
On 1 January 2017 Alpha Plc has acquired 60% shares of
Nova Ltd and made immediate cash payment of Rs.45 Mn as Non-current Liabilities
the consideration. Non-controlling interest is calculated
Term Loan 22,000 10,500
proportionately to the net assets of Nova Ltd.
The financial statements as at 31 December 2017 are given Current Liabilities 9,400 6,100
below.
157,900 74,500
The Statements of Comprehensive Income for the year
ended 31 December 2017 Additional Information is given below.

Alpha Nova 1. Total Sales made by Nova Ltd to Alpha Plc during the
year was Rs. 22,000,000. Nova Ltd set the selling price at
Rs. '000 Rs. '000 a markup of 20% on cost. At the end of year, Alpha Plc
Revenue 152,000 115,000 had 30% of these goods unsold.

Cost of Sales (86,000) (68,000) 2. Alpha Plc has settled an electricity bill of Nova Ltd
amounting Rs 35,000. This value is included in the
Gross Profit 66,000 47,000 administrative expense of both the companies.
Other Income 24,000 6,900
3. On 01 May 2017, Alpha Plc has sold a machine to Nova
Administrative Expense (39,500) (24,700) Ltd at a price of Rs. 5.6 Mn. Alpha Plc had bought this
machine on 01stAugust 2014 for Rs. 8 Mn and the
Finance Expense (31,800) (18,600) applicable depreciation rate is 20%.
Profit Before Tax 18,700 10,600
4. At the beginning of the year, Alpha Plc given a short-
Tax Expense (5,300) (3,000) term loan of Rs. 1.5 Mn to Nova Ltd and had charged an
interest of Rs. 150,000 on this amount. At the end of the
Profit for the year 13,400 7,600 year, Nova Ltd settled this amount together with the
(5,500) (3,400) interest. Both the companies have recorded for this
Dividend Expenses transaction (Capital & interest) in their books
Retained Profit for the respectively.
7,900 4,200
year
5. Other income of Alpha Plc consists of dividend income
received from Nova Ltd.
The Statements of Financial Position
As at 31 December 2017 You are required to prepare,
Alpha Nova a) The Consolidated Statement of Financial Position as at
31 December 2017
Rs. '000 Rs. '000 b) The Consolidated Statement of Comprehensive Income
for the year ended 31 December 2017
Assets
Non-Current Assets
Property Plant and
64,000 42,500
Equipment
Investment in Nova 45,000 -
Current Assets
Inventory 18,500 9,800
Trade Receivables 9,200 6,500
Other Receivables 3,500 3,100
Cash and equivalents 17,700 12,600

157,900 74,500

Equity and Liability

Equity
Share Capital (Equity share
80,000 36,000
of Rs.1/- each)