Working 3 - Unrealised profit on inventories Sales of $600k x 20% x 50% left in inventories at y/e = $60k Working 4 - Retained earnings $000 15,000
As per SOFP Pre-acquisition reserves Adjustments arising from movement in FV adjustments Group share 75% Unrealised profit on inventory transfer Goodwill impairment (75% x 104) (W2) Consolidated reserves
$000 8,000 (6,400) (368) 1,232
924 (60) (78) 15, 786
Working 5 - Non-controlling interests NCI at acquisition (at fair value) 25% x post acquisition retained earnings $1,232,000 (W4) Goodwill impairment (25% x 104) (W2)
November 2011
7
$000 3,200 308 (26) 3,482
Examiner's Answers CPGA