Acquisition Analysis And Consolidation Worksheet Entries | Statement Of Profit And Loss | Statement Of Financial Position

1. Calculation of Acquisition Analysis

Acquisition Analysis as at 1 July, 2015
General Reserve	34,000
Retained Earnings Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	20,000
Fair valuation of asset and liabilities
Land	3,500
Plant	10,500
Inventory	5,600
Provision for damages	(5,600)
Recorded Goodwill	(2,000)
Net fair value of identifiable assets and liabilities	2,16,000
Consideration paid	2,27,500
Goodwill	11,500
Goodwill already recorded	2,000
Net goodwill to be recorded	9,500

2. Consolidation worksheet entries

Consolidation Worksheet entries as on 30 June, 2016
1. Business Combination Valuation Entries
Land a/c	Dr.	5,000
To Deferred Tax Liability a/c		(1,500)
To Business Combination Valuation Reserve a/c		(3,500)
(Land fair valued)
Inventory a/c	Dr.	8,000
To Deferred Tax Liability a/c		(2,400)
To Business Combination Valuation Reserve a/c		(5,600)
(Inventory fair valued)
Accumulated Depreciation – Plant a/c	Dr.	25,000
To Plant a/c		(10,000)
To Deferred Tax Liability a/c		(4,500)
To Business Combination Valuation Reserve a/c		(10,500)
(Plant fair valued after adjusting accumulated dep)
Depreciation a/c	Dr.	5,000
To Accumulated depreciation a/c		(5,000)
(depreciation recorded on fair valued amount)
Deferred tax liability a/c	Dr.	1,500
To Income tax expense a/c		(1,500)
(income tax expense on above depreciation recorded)
Cost of sales a/c	Dr.	7,200
To Income tax expense a/c		(2,160)
To Transfer from business combination valuation reserve		(5,040)
(sale of inventory (90%) recorded)
Accumulated impairment loss a/c	Dr.	12,000
To Goodwill a/c		(2,500)
To Business combination valuation reserve		(9,500)
(impairment of goodwill recorded)
Business combination valuation reserve a/c	Dr.	1,400
Deferred tax asset a/c	Dr.	600
To Provision for damages a/c		(2,000)
(provision for damages recorded)
Transfer from Business combination valuation reserve a/c	Dr.	4,200
Income tax expense a/c	Dr.	1,800
To Gain on reversal of provision for damages a/c		(6,000)
( reversal of excess provision of damags recorded earlier reversed)
2. Pre-Acquisition Entries
Share Capital a/c	Dr.	1,50,000
General Reserve a/c	Dr.	34,000
Retained Earnings (01.07.2015)	Dr.	20,000
Business Combination Valuation Reserve a/c	Dr.	23,500
To Shares in Cathy Ltd. a/c		(2,27,500)
(Purchase of shares of William Ltd.)

Worksheet entries as on 30 June, 2016
1. Business Combination Valuation Entries
The entries on 30 June, 2016 are effected by:
– sale of inventory
– remeasurment of provision of damages
– transfer from general reserve to retained earnings
– call of 10c per shares on issued shares
Transfer from business combination valuation reserve a/c	Dr.	5,040
To Business Combination Valuation Reserve a/c		(5,040)
(sale of inventory recorded)
Transfer from business combination valuation reserve a/c	Dr.	4,200
To Business Combination Valuation Reserve a/c		(4,200)
(remeasurement of provision for damages recorded)
General Reserve a/c	Dr.	17,000
To Retained earnings a/c		(17,000)
(amount transferred)
Share capital a/c	Dr.	10,000
To Shares in William Ltd. a/c		(10,000)
(Payment for share money called by William Ltd.)

1. Statement of profit or loss

Black Hole Ltd.
Statement of Profit and Loss and other Comprehensive Income
For the year ended on June 30, 2018
		(Amount in $)
Particulars	Notes	For the year ended on June 30, 2018
Revenue		8,25,000
Cost of sales		(4,50,000)
Gross Profit		3,75,000
Other income	15	6,000
Administration expenses		(2,36,300)
Other expenses		(10,000)
Finance cost		(28,700)
Profit before income tax		1,06,000
Less: Income tax expense		(50,400)
Profit for the year		55,600
Other comprehensive income
Items that will not be classified to profit or loss:
Gain on Revaluation of assets	16	55,000
Income tax expense on OCI		(16,500)
Other comprehensive income for the year (net of tax)		38,500
Total comprehensive income for the year		94,100

1. Statement of financial position for Black Hole

Black Hole Ltd.
Statement of Financial Position
For the year ended on June 30, 2018
		(Amount in $)
Particulars	Notes	As at June 30, 2018
Current assets
Cash and cash equivalents	1	500
Trade receivables	2	45,200
Inventories	3	87,700
Other current assets	4	7,000
Total current assets		1,40,400
Non-current assets
Property, plant and equipment
Tangible assets	5	7,80,000
Intangible assets	6	95,000
Deferred tax assets (net)		9,800
Total non-current assets		8,84,800
Total assets – (a)		10,25,200
Current liabilities
Trade and other payables	8	69,500
Short-term borrowings	7	1,99,200
Current tax liabilities	9	52,100
Provisions	10	18,000
Other liabilities	11	12,800
Total current liabilities		3,51,600
Non-current liabilities
Borrowings	12	2,00,000
Provisions	13	16,200
Deferred tax liability (net)		18,400
Total non-current liabilities		2,34,600
Total liabilities – (b)		5,86,200
Net assets (a-b)		4,39,000
Equity
Share capital		2,00,000
Retained earnings	14	1,29,000
Revaluation reserves		85,000
General reserve		25,000
Total equity		4,39,000

Notes to financial statement

Black Hole Ltd.
Notes to the Financial Statements
For the year ended on June 30, 2018
Note No.	Particulars		Amount (in $)
1	Cash and cash equivalents
	Cash at bank		500
	Total		500
2	Trade receivables
	Accounts receivable		58,000
	Allowance for doubtful debts		(12,800)
	Total		45,200
3	Inventories
	Inventories		87,700
	Total		87,700
4	Other current assets
	Prepaid Insurance		7,000
	Total		7,000
5	Property, plant & equipment – Tangible assets
	Land
	– cost		2,20,000
	Buildings
	– cost		3,80,000
	Plant and equipment
	– cost	2,22,500
	– accumulated dep	(42,500)	1,80,000
	Total		7,80,000
6	Property, plant & equipment – Intangible assets
	Goodwill
	– cost	1,05,000
	– accumulated impairment loss	(10,000)	95,000
	Total		95,000
7	Short-term borrowings
	Current portion of mortgage loans		50,000
	Current portion of debentures		80,000
	Bank overdraft (at call)		69,200
	Total		1,99,200
8	Trade and other payables
	Accounts payable		69,500
	Total		69,500
9	Current tax liability
	Current tax liability		52,100
	Total		52,100
10	Current provisions
	Provision for employee benefits
	Annual leave		18,000
	Total		18,000
11	Other liabilities
	Dividend payable		10,000
	Interest payable		2,800
	Total		12,800
12	Non-current Borrowings
	Mortagage Loans	2,50,000
	Less: Current portion of mortgage loans	(50,000)	2,00,000
	7% debentures	80,000
	Less: Current portion of debentures	(80,000)	–
	Total		2,00,000
13	Non-current Provisions
	Provision for employee benefits
	Long-service leave		16,200
	Total		16,200
14	Retained earnings
	Opening balance		1,28,400
	Add: Profit for the year		55,600
	Less: Dividend paid & payable		(30,000)
	Less: Transfer to general reserve		(25,000)
	Total		1,29,000
15	Other Income
	Interest revenue		2,500
	Dividends revenue		3,500
	Total		6,000
16	Gain on Revaluation of assets
	Gain on Revaluation of Land		25,000
	Gain on Revaluation of Building		30,000
	Total		55,000

1. Statement of changes in Equity

Black Hole Ltd.
Statement of Changes in Equity
For the year ended on June 30, 2018
Particulars	Amount
SHARE CAPITAL
Balance as at 1 July, 2017	1,00,000
Shares issued during the year	1,00,000
Balance as at June 30, 2018	2,00,000
RETAINED EARNINGS
Balance as at 1 July, 2017	1,28,400
Profit for the year	55,600
Dividends paid	(20,000)
Dividends provided for	(10,000)
Transfer to general reserve	(25,000)
Balance as at June 30, 2018	1,29,000
Revaluation Surplus
Balance as at 1 July, 2017	46,500
Other comprehensive income	38,500
Balance as at June 30, 2018	85,000
GENERAL RESERVE
Balance as at 1 July, 2017	–
Transfer to general reserve	25,000
Balance as at June 30, 2018	25,000

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