Faculty
Faculty of Business and Accounting
Assessment Name
Internal Test
5
Paper Code
AFR2/C22/I-05
Module Name
Financial
Reporting 2
Module Code
A7-FR2–17
Semester
Mar – Aug 22
Submission Mode
Blackboard
30
Duration
Submission
Exam/Submission
Date
(Eg: End/Sup)
( E.g Jul-Dec-2021)
Total Marks
Assessment Type
Eff Date: 18-03-2021
(Eg:
Written/Practical/Submission)
(E.g Turnitin, blackboard,
hardcopy)
22 June 22 @
8.00 am
Instructions
1.
Answer all questions.
2. Type USING Times Roman or Arial 12. Spacing should be 1.5
3. Answers should be uploaded in Word document
4. Please write your Student ID and Campus clearly on the front page of the answer sheet. Failure to do so may
result in your work not being marked.
QP-ASM-001|Rev 006
5. Answers should be clear and readable.
6. Save the file using student ID, module abbreviation, Month, Year (e.g. SGB123456_FR1_END NOV 2021).
7. Late submissions will not be allowed or graded.
8. At the end of the exam, submit the answer through Blackboard on or before 22 June 22, 08:00 HRS
No alternative routes of submission are allowed.
9. You are advised to start trying to upload your answers earlier to ensure that you have time to respond to any
challenges.
10. All cases of suspected plagiarism will be treated seriously. Your attention is drawn to the sections on to
the plagiarism in the student regulations.
Page 1 of 3
Answer all the questions (25 marks)
Question 1
Silver plc acquired 75% of the issued share capital of Gold Ltd on 1 January 2019.
Summarised statements of profit or loss for the year ended 31 December 2019 are shown
below:
Silver plc
£000
Gold Ltd
£000
Continuing operations
Revenue
Cost of sales
(56,400)
(8,754)
32,600
11,146
Eff Date: 18-03-2021
19,900
Other income – dividend from Brown Ltd
QP-ASM-001|Rev 006
Gross profit
89,000
(a) Draft the consolidated statement of profit or loss for Silver plc and its subsidiary up to and including the profit
from operations line for the year ended 31 December 2019.
(15 marks)
4,950
–
Operating expenses
(14,342)
(6,735)
Profit from operations
23,208
4,411
Additional information
During the year Silver sold goods which had a cost of £350, 000 to Gold Ltd for £795, 000. None of these goods remain in
inventory at the end of the year.
Goodwill of £350, 000 arose at the acquisition. The directors of Silver plc concluded that the goodwill had been impaired
by 20% during the year.
Question 2
Bull plc acquired 80% of the issued share capital of bear Ltd on 1 January 2018 for £4,600, 000. At that date Bear Ltd had
issued share capital of £3,000, 000 and retained earnings of £840, 000.
The summarised statements of financial position of the two companies one year later at 31 st December 2018 are as
follows:
Statements of financial position as at 31st December 2018
Bull plc
Bear Ltd
£000
£000
Page 2 of 3
Assets
Investment in Bear Ltd
4,600
Non-current assets
7,500
4,590
Current assets
3,800
1,570
Total assets
15,900
6,160
Share capital
5,000
3,000
Retained earnings
7,800
1,510
12,800
4,510
Non-current liabilities
1,000
750
Current liabilities
2,100
900
Total liabilities
3,100
1,650
15,900
6,160
Total equity and liabilities
Equity
QP-ASM-001|Rev 006
Eff Date: 18-03-2021
Total equity
Total equity and liabilities
Additional data
The fair value of non-current assets of Bear Ltd at 1 January 2018 was £4,200, 000. The book value of the non-current
assets was £3,900, 000. The revaluation has not been recorded in the books of Bear Ltd. (ignore any effects of
depreciation for the year)
The directors of Bull plc have decided that non-controlling interest be valued at their proportionate
share of Bear’s net assets.
(a) Draft a consolidated statement of financial position for Bull plc and its subsidiary
as at 31st December 2018.
(15 marks)
*****THE END *****
Page 3 of 3