BS 420
13TH MAY, 2024
QUESTION ONE
……………………………………………………………………………………………………………..
The following are the statements of financial position of Natasha plc, its subsidiary Joshua Ltd
and its associate Chilufya Ltd:
Statements of financial position as at 31 December 20X9
Natasha Joshua Chilufya
ASSETS K K K
Non-current assets
Land at cost 240,000 84,000
Land at valuation 180,000
Investment in Joshua 300,000
Investment in Chilufya 72,000
Investments 18,000
Current assets
Inventories 15,000 99,000 5,400
Trade receivables 33,000 98,400 1,200
Current account – Joshua 18,000
Current account – Chilufya 2,400
Cash 6,600 67,200 300
Total current assets 75,000 264,600 6,900
Total assets 705,000 444,600 90,900
EQUITY AND LIABILITIES
K1 shares 300,000 120,000 30,000
PRINCE DANIELS – 2024
Revaluation reserve 90,000
Retained earnings 270,000 216,000 57,600
570,000 426,000 87,600
Current liabilities
Trade payables 135,000 3,600 900
Current account – Natasha C — 15,000 2,400
Total equity and liabilities 705,000 444,600 90,900
NOTES
a. On 1 January 20X3 Natasha plc acquired 75% of Joshua Ltd for K300,000 when Joshua’s
share capital and reserves were K252,000. At the date of acquisition, the net book value of
Joshua’s non-current assets were K90,000. Joshua immediately included the revaluation in its
statement of financial position.
b. On 1 January 20X5 Natasha acquired 20% of Chilufya Ltd for K72,000 when the fair value of
Chilufya’s net assets were K42,000.
c. Goodwill has been impaired in Joshua by K77,700 and in Chilufya by K31,800.
d. At the year end, Natasha plc has inventory acquired from Joshua and Chilufya. Joshua had
invoiced the inventory to Natasha C for K6,000 – the cost to Joshua had been K1,200 – and
Chilufya had invoiced Natasha C for K3,000 – the cost to Chilufya had been K1,800.
Required: Prepare Natasha C plc’s consolidated statement of financial position as at
31.12.20X9.
QUESTION TWO
………………………………………………………………………………………………………….
On 30 June 20X0 Mapalo Ltd acquired 60% of the common shares of a German subsidiary
Natasha BOZ. At that date the balance on the retained earnings of Natasha BOZ was
€20,000,000. The summarised statements of comprehensive income and statement of financial
position of Mapalo Ltd and Natasha BOZ at 30 June 20X3 were as follows:
PRINCE DANIELS – 2024
Statements of comprehensive income for the year ended 30 June 20X3
Mapalo Ltd Natasha BOZ
£000 €000
Sales 430,000 140,000
Opening inventories 70,000 21,200
Purchases 250,000 80,000
Closing inventories 25,000 17,200
Cost of sales 295,000 84,000
Gross profit 135,000 56,000
Dividend received 2,400 NIL
Depreciation 40,000 12,000
Other expenses 10,600 4,000
Interest paid 7,000 2,000
Total expenses 57,600 18,000
Profit before taxation 79,800 38,000
Taxation 20,000 12,000
Profit after taxation 59,800 26,000
Dividend paid 30.6.20X3 25,000 8,000
Statements of financial position as at 30 June 20X3
£000 €000
Non-current assets 140,000 90,000
Investment in Natasha BOZ 4,500
Current assets:
Inventories 25,000 17,200
PRINCE DANIELS – 2024
Trade receivables 60,500 20,000
Natasha BOZ 4,000
Cash 11,000 800
100,500 38,000
245,000 128,000
Current liabilities:
Trade payables 60,000 18,000
Mapalo Ltd 8,000
Taxation 20,000 12,000
Non – Current Liabilities
Bonds 50,000 16,000
130,000 54,000
Share capital 52,000 6,000
Retained earnings 63,000 68,000
245, 000 128,000
NOTES
The following information is also available:
1. Exchange rates were as follows:
At 30 June 20X0 £1 = €5
Average for the year ending 30 June 20X3, an approximation of the rate
on the date of trading transactions and expenses £1 = €4
At 30 June/1 July 20X2 £1 = €3.5
At 30 June 20X3 £1 = €2
2. It is assumed that the functional currency of Natasha BOZ is the euro.
3. An amount of €1,380,000 was written off goodwill as an impairment charge in the current
year, and €2,760,000 in previous years.
PRINCE DANIELS – 2024
4 Non-controlling interests are measured using the proportionate method
Required:
Prepare consolidated accounts.
But they that wait upon the Lord shall renew their strength; they shall mount up with wings
as eagles; they shall run, and not be weary; and they shall walk, and not faint. Isaiah 40;31
PRINCE DANIELS – 2024
