Please help me, I will neatly upvote your answer On 1 October 20X7, Pedantic acquired 80% of the equity share capital of Sophistic in a shareexchange of two shares in Pedantic for three shares in Sophistic. The issue of shares has not yetbeen recorded by Pedantic. At the date of acquisition shares in Pedantic had a market value of $5cach. Below are the summarised draft financial statements of both entities.Statement of profit or loss for the year ended 30 September20X8PedanticSophisticS000S00Revenue85,00042,000Cost of sales(63,000)(32,000)Gross profit22,00010,000Distribution costs(4,000)(3,500)Administrative expenses(8,000)(1,000)Finance costs(600)(500)Profit before tax9,4005,000Income tax expense(2,162)(1,000)Profit for the year7,2384,000Statements of financial position as at 30 September 20X8Pedantic Sophisticso00s00AssetsNon-current assetsProperty, plant & equipment40,60014,600Current Assets16.0007.100Total Assets56.60021.700Equity & liabilities Equity shares of $1 cach10,0006,000Retained Earnings35.4007.00045,40013,000Non-current liabilities10% Loan Notes3,0004,000Current liabilities8.2004.700Total equity & liabilities56,60021,700The following information is relevant:(i) At the date of acquisition, the fair values of Sophistic's net assets were equal to theircarrying amounts.(ii) Sales from Sophistic to Pedantic in the post-acquisition period were $6 million.Sophistic made a mark up on cost of 25% on these sales. One quarter of these goodsremained in the inventory of Pedantic at the year-end.(iii) Other than where indicated, statement of profit or loss items are deemed to accrueevenly on a time basis.(iv) At 30 September 20X8, Sophistic had a receivable due from Pedantic of $1 million.This agreed with the amount payable to Sophistic in Pedantic's financial statements.(v) Pedantic has a policy of accounting for any non-controlling interest at fair value. The fair valueof the non-controlling interest at the acquisition dateConsolidated goodwill was not impaired at 30 September 20X8.was$2.8 million.Required:1. What figure for goodwill on consolidation should appear in the consolidated statement offinancial position of the group at 30 September 20X8?2. What figure for non-controlling interest should appear in the consolidated statement of financialposition of the Pedantic group at 30 September 20X8?3. What should the figure for retained earmings be in the group's consolidated statement of financialposition at 30 September 20X8?4. What profit is attributable to the parent company in the consolidated statement of profit or lossof the Group for the year to 30 September 20X8?5. Prepare the consolidated statement of profit or loss for Pedantic for the year ended30 September 20X8.6. Prepare the consolidated statement of financial position for Pedantic as30 September 20X8.at

The consolation is the accounting process in which the financial results of the parent company and…

Required: 1. What figure for goodwill on consolidation should appear in the consolidated statement of financial position of the group at 30 September 20X8? 2. What figure for non-controlling interest should appear in the consolidated statement of financial position of the Pedantic group at 30 September 20X8? 3. What should the figure for retained earnings be in the group's consolidated statement of financial position at 30 September 20X8? 4. What profit is attributable to the parent company in the consolidated statement of profit or loss of the Group for the year to 30 September 20X8? 5. Prepare the consolidated statement of profit or loss for Pedantic for the year ended 30 September 20X8. 6. Prepare the consolidated statement of financial position for Pedantic as at 30 September 20X8.

Required: 1. What figure for goodwill on consolidation should appear in the consolidated statement of financial position of the group at 30 September 20X8? 2. What figure for non-controlling interest should appear in the consolidated statement of financial position of the Pedantic group at 30 September 20X8? 3. What should the figure for retained earnings be in the group's consolidated statement of financial position at 30 September 20X8? 4. What profit is attributable to the parent company in the consolidated statement of profit or loss of the Group for the year to 30 September 20X8? 5. Prepare the consolidated statement of profit or loss for Pedantic for the year ended 30 September 20X8. 6. Prepare the consolidated statement of financial position for Pedantic as at 30 September 20X8.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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