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Subject: CAF-7 FAR II (Test 4) Teacher: Sir Nasir Abbas Date: May 29, 2021

The document provides a consolidated balance sheet for Gluco Group as of December 31, 2020 and includes workings to calculate figures such as goodwill, retained earnings, and unrealized profit. It presents the consolidated assets, equity, and liabilities of Gluco Group and its subsidiaries after a business acquisition and share exchange. Calculations are shown for non-current assets, equity components, and current liabilities using figures provided in the document.

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174 views

Subject: CAF-7 FAR II (Test 4) Teacher: Sir Nasir Abbas Date: May 29, 2021

The document provides a consolidated balance sheet for Gluco Group as of December 31, 2020 and includes workings to calculate figures such as goodwill, retained earnings, and unrealized profit. It presents the consolidated assets, equity, and liabilities of Gluco Group and its subsidiaries after a business acquisition and share exchange. Calculations are shown for non-current assets, equity components, and current liabilities using figures provided in the document.

Uploaded by

A
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Suggested Solution

Subject: CAF-7 FAR II (Test 4)


Date: May 29, 2021
Teacher: Sir Nasir Abbas

Answer – 1
(a) Gluco Group
Consolidated balance sheet
as at December 31, 2020

Rs. million Marks


Non-current assets
PPE [500 + 400 - 3.6 (W-5)] 896.40 1.5
Goodwill [W-1] 23.00 0.5
Investments [110 - 90(W-1.1) + 40] 60.00 0.5

Current assets
Debtors [120 + 80 - 5 - 10] 185.00 1
Inventory [70 + 60 - 10(W-4) - 3(W-4)] 117.00 1
Cash and bank balance [60 + 80 + 5] 145.00 0.5
1,426.40
Equity
Share capital 330.00
Share premium [9 x Rs. 20] 180.00 0.5
Retained earnings [W-2] 578.24
Non controlling interest [W-3] 228.16

Current liabilities
Creditor and other payable [80 + 40 - 10] 110.00 0.5
1,426.40
-
Workings [All figures in Rs. million]
W-1 Goodwill
Investment:
Share [9 (W-1.1) x Rs. 30] 270.00 0.5
Fair value of NCI [8 x Rs. 17] 136.00 0.5
Less: net assets:
Capital 200.00
RE [W-1.2] 160.00 (360.00)
46.00
Impairment [46 x 50%] (23.00) 0.5
23.00
Suggested Solution
W-1.1 Share exchange
Capital as per trial 330.00
Bonus dividend 2019 [330 x 10/110] (30.00)
Capital prior to share exchange (210.00)
Face value of shares issued for
acquisition 90.00
No. of shares issued [Rs. 90m / Rs. 10] 9 m shares 2

W-1.2 RE at acquisition
As per trial 280.00
Dividend 2019 [200 x 5%] 10.00
PAT 2019 (150.00)
Dividend 2018 [200 x 10%] 20.00
160.00 1

W-2 Retained earnings


GL's RE [320 + 130] 450.00
Less: URP on goods [W-4] (10.00) 0.5
Add: ML's RE [280 + 140] 420.00
Less: Pre-acquisition profits (160.00)
Less: URP on goods [W-4] (3.00) 0.5
Less: Impairment of GW [W-1] (23.00) 0.5
Less: URP on machine [W-5] (3.60) 0.5
230.40
60% 138.24
578.24 1
W-3 NCI
Fair value of NCI 136.00
Post-acq RE [230.4 x 40%] 40% 92.16 0.5
228.16

W-4 URP on goods


GL stock ML stock
Stock 30.00 40.00 [80 x 50%]
Profit % earned by seller 10% 25%
URP of seller 3.00 10.00

W-5 URP on machine


Profit on sale [16 x 25%] 4.00
Depreciation [4 x 20% x 6/12] (0.40)
3.60

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