代写留学生会计作业-会计专业留学作业，会计专业留学作业-corporate ACCOUNTING
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CASE STUDY
On 1 July 2008, Global Crisis Ltd acquired 80 percent of the share capital and reserves of Magic Ltd for $540 000. On the date of control, all assets were recorded at fair values except Land which had a carrying amount of $150 000 and a fair value of $170 000..
The abridged balance sheet data for Magic Ltd on 1 July 2008 was as follows:
Share Capital $500 000
General Reserve 80 000
Retained Earnings 50 000
Revaluation Surplus
20 000
The financial data for Global Crisis Ltd and Magic Ltd at consolidation date, 30 June 2011, is as follows:
Global Crisis
Magic
$
$
STATEMENT OF COMPREHENSIVE INCOME
Sales revenue
720 000
530 000
Cost of goods sold
610 000
410 000
Gross profit
110 000
120 000
Total expenses
230 000
160 000
Trading profit
(120 000)
(40 000)
Other revenue
240 000
120 000
Operating profit before tax
120 000
80 000
Income tax expense
40 000
25 000
Operating profit after tax
80 000
55 000
Other Comprehensive Income
Revaluation Surplus Plant and Equip
20 000
Less Income Tax
(6000)
Total Comprehensive Income
80 000
69 000
STATEMENT OF CHANGES IN EQUITY
Global Crisis Ltd ($’000)
SC GR RS RE Total
Balance 1/7/2010 600 80 20 200 900
Movement for Year
Total Comp. Income 80 80
Dividend Paid (20) (20)
Final Dividend Declared (25) (25)
Balance 30/6/2011 600 80 20 235 935
Magic Ltd ($’000)
Balance 1/7/2010 500 100 60 112 772
Movement for Year
Total Comp income 14 55 69
Dividend Paid (10) (10)
Final Dividend Declared (15) (15)
Closing Balance 500 100 74 142 816
STATEMENT OF FINANCIAL POSITION
Credit balances
Share capital
600 000
500 000
General reserve
80 000
100 000
Revaluation Surplus
20 000
74 000
Retained earnings
235 000
142 000
Other Liabilities
125 000
31 000
Dividend payable
25 000
15 000
Accumulated dep’n – Plant and Equipment
115 000
88 000
Total Credits 1200 000
950 000
Debit balances
Accounts receivable
80 000
30 000
Inventory
100 000
170 000
Shares in Magic Ltd
540 000
-
Investment in Lijiang Ltd
100,000
-
Land
100 000
150 000
Plant & equipment
200 000
450 000
Deferred Tax Asset
50 000
40 000
Other assets
30 000
110 000
Total Debits 1 200 000
Additional information:
The following transactions took place between Global Crisis Ltd and Magic Ltd:
(1) During the year ended 30 June 2011 Magic Ltd sold inventory to Global Crisis Ltd for $23 000, recording a profit before tax of $3 000. Global Crisis Ltd has since resold half of these items.
(2) During the year ended 30 June 2011 Global Crisis Ltd sold inventory to Magic Ltd for $18 000, recording a profit before tax of $2 000. Magic Ltd has not resold any of these items.
(3) On 1 June 2011 Magic Ltd paid $1 000 to Global Crisis Ltd for services rendered.
(4) During the year ended 30 June 2010 Magic Ltd had sold inventory
to Global CrisisLtd. At 30 June 2010 Global Crisis Ltd still had inventory on hand on which Magic Ltd had recorded a pre tax profit of $4 000
(5) Goodwill on acquisition:
- Goodwill on acquisition has been subject to annual impairment testing each year that the group entity has been in existence. Previous impairment writedowns totalled $3800
- For the current year, the directors advise that an impairment write down of goodwill of $5 000 is required.
6) On 1 July 2010 Magic Ltd sold Plant and Equipment which had cost $180 000 to
Global Crisis Ltd for $150 000, recording a profit of $20 000 before tax. Global Crisis Ltd applies a 10% per annum straight line method of depreciation for these assets
7) Global Crisis Ltd adopts the partial goodwill method in its consolidated accounts
8) http://www.1daixie.com/liuxueshengzuoye/
The tax rate for all companies is 30%.
Equity Investment details:
On 1 January 2011 Global Crisis Ltd acquired a 40% holding in Lijiang Ltd for $100 000. The directors of Global Crisis believe that this holding constitutes significant influence. At the date of acquisition the shareholder’s equity of Lijiang Ltd was as follows:
Share Capital $160 000
General Reserve 20 000
Retained Earnings 40 000
All assets of Lijiang Ltd are stated at fair value.
Other Information
For the period 1 January 2011 to 30 June 2011 Lijiang Ltd made a net profit after tax of
$42 000 and paid a dividend of $10 000 on 1 April 2011.
During the period 1 January 2011 to 30 June 2011 Global Crisis Ltd sold inventory to Lijiang Ltd for $20 000. This had cost Global Crisis Ltd $16 000 and was still held by Lijiang Ltd at 30 June 2011
At 30 June 2011 the directors of Global Crisis Ltd believe that goodwill arising on the investment in Lijiang Ltd is impaired and should be written down by $1 200.
REQUIRED:
a. Prepare the consolidation journal entries for consolidating the accounts of Global Crisis Ltd and Magic Ltd for the year ended 30 June 2011.
b. Prepare and post the journal entries required to record Global Crisis Ltd’s
interest in Lijiang Ltd at 30 June 2011
c. Prepare the consolidation worksheet
d. Show the calculation of the non controlling interest at 30 June 2011
e. Prepare the consolidated financial statements for the year ended 30 June 2011
7+ 3 +2+3+2 = 17 marks