JOEY GROUP Solution

JOY GROUP – QUESTION 5, PAGE 316 OF CR VOL.
Joey Group
Consolidated Statement of financial position as at 30th November 2014
GHSm
Non-Current Assets
Property, Plant and Equipment (wk9) 6,709.00
Goodwill (wk4) 89.00
Intangible Assets - Franchise right (20-5) 15.00
Investment in Joint Venture 0.75
6,813.75
Current asset 2,011.30
Total Assets 8,825.05
Equity and Liabilities
Equity:
Equity share Capital (Joey Ltd only) 850.00
Consolidated Retained Earnings (wk7) 3,450.25
Consolidated Other Components of Equity (wk8) 258.50
4,558.75
Non-Controlling Interest(wk6) 908.10
5,466.85
Current Liabilities 588.20
Non-Current Liabilities (1895+675+200) 2,770.00
Total Equity & Liabilities 8,825.05
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Workings (GHS’m)
1 (a) Level of Control

Margy (M) Hulty (H)
Group - 1st Acquisition 30% 80%
2nd Acquisition 40% 0
70% 80%
NCI 30% 20%
1 (b) Effective date of control

Margy - 1/12/13
Hulty - 1/12/13
1 (c) Period of Consolidation

Margy (01/12/13 - 30/11/14) Full year
Hulty (01/12/13 - 30/11/14) Full year
2. Cost of Investment
3. Net Asset of Subsidiary

Margy (M) Hulty (H)
At Acq At Rep Post Acq At Acq At Rep Post Acq
Share Capital 1020 1020 0 600 600 0
Retained Earnings 900 980 80 300 350 50
Other Comp of Equity 70 80 10 40 40 0
Contingent Liability -6 0 6 0 0 0
Adj. on contingent liability 1 0 -1 0 0 0
Fair value Loss -40 -40 0 0 0 0
Excess Depn (40/20yrs) 0 2 2 0 0 0
Land (Bal figure) 266 266 0 0 0 0
FV of Franchise (Bal fig) 0 20 20 0
Additional Depn (20/[5-1]years 0 0 0 0 -5 -5
Fair value (2250-40+1) 2211 2308 97 960 1005 45
4. Goodwill
Margy Hulty
Cost of Investment
1st Acquisition 705 700
2nd Acquisition 975 0
1680 700
Fair value NCI at Acq (See note 1 & 4) 620 250
2300 950
Net Assets at Acquisition (wk3) (2211) (960)
Goodwill Asset (Negative Goodwill) 89 (10)
5. Intra-group Transaction
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6. NCI at Reporting
Margy:
At Acquisition (See note 1) 620
Share of post Acq NA (30% x 97) 29.1
Hulty:
At Acq 250
Share of Post Net Asset (20% x 45) 9
908.1
7. Consolidated Retained Earnings

All of Joey 3,340
Share of Post Acq Net assets
Margy (70% x [97-10) 60.9
Hulty (80% x 45) 36
Joint operation (w7ii) -0.7
Profit from Joint venture (w7ii) -1.5
Share of profit from joint venture
(50% x 1.50) 0.75
Gain on 30% Investment in Margy (705 - [600+90+10]) 5
Additional Depn (NCA held for sale):
(0.30 x 4/12) i.e. 1/12/14-31/3/14 -0.1
Loss on classification (NCA held for sale) (wk7c(ii) -0.3
Profit on Disposal of PPE (15.6-0.30) - 15.10 0.2
Negative Goodwill 10
3,450.25
7 (b) (i)
Joint operation for 6month (1/12/13-31/5/14)
Sales 5m x 6/12 2.5
Cost of ales 2m x 6/12 -1
1.5
7b(ii) Profit of CP (1/12/13 - 31/5/14)
1/6/2014
Commission (2.5 x 10%) 0.25
Profit sharing (50% x 1.5) 0.45
0.7
Dr Profit or Loss 0.7
Cr Payable to CP 0.7
7(b)(iii) Derecognising profit in Joint Venture

Total Profit of JCP included in Profit or loss of Joey
Dr Retained Earnings 1.5
Cr Payablle to JCP 1.5
7 b(iv) Share of Profit from Joint venture

Cr Retained Earnings (50% x 1.50) 0.75
Dr Investment in Joint Venture 0.75
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7c NCA Held for sale
7 (c)(i) Rev gain / Loss - 1/4/2014
Rev Amount (Fair value) 15.4
Carrying amount:
Cost 14
Additional Depn (0.3 x 4/12) -0.1 -13.9
Revaluation gain 1.5
7 (c) (ii) Loss on classification (impairment)

Rev amount (Carrying Amount) 15.4
Net Realisable Value (15.4-0.3) -15.1
Loss on classification (impairment) 0.3
7 (c) (iii) Proceeds on Disposal

Cash Proceed (Fair value) 15.6
Cost to sell 0.3
Net Realisable Value 15.3
Carrying Amount (NRV as at 1/4/2021) -15.1
Profit on Disposal 0.2
Accounting Treatment
Dr Receivable 15.3
Cr PPE (Derecognise NCA held for sale) 15.1
Cr Retained Earnings 0.2
8. Other Component of Equity
All of Joey 250
Share of NA of Sub (70% x 10) 7
Rev gain (NCA held for sale) 1.5
258.5
9. Property Plant and Equipment

Balance at 30/11/2014
Joey 3295
Margy 2000
Hulty 1200
6495
Decrease in value of building (wk3) -40
Additional Depreciation on building(wk3) 2
Increase in value of land - Margy 266
NCA held for sale - Depreciation before reclassification -0.1
NCA held for sale - Revaluation gain 1.5
NCA held for sale - Loss after reclassification -0.3
Derecognise NCA held for sale -15.1 214
6709
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10. Current Asset
Joey 985
Margy 861
Hulty 150
Asset Debtor 15.3
2011.3
11. Current Liabilities

Joey 320
Margy 106
Hulty 160
Joint operation - CP 0.7
Joint Venture to JCP 1.5
588.2
WATCH THE VIDEO THAT EXPLAINS ALL THE NOTE IN THE QUESTION
IT WILL BE AVAILABLE BY CLOSE OF MONDAY, 11TH OCTOBER, 2021
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JOY GROUP – QUESTION 5, PAGE 316 OF CR VOL.

1 (a) Level of Control

1 (b) Effective date of control

1 (c) Period of Consolidation

3. Net Asset of Subsidiary

7. Consolidated Retained Earnings

7(b)(iii) Derecognising profit in Joint Venture

7 b(iv) Share of Profit from Joint venture

7 (c) (ii) Loss on classification (impairment)

7 (c) (iii) Proceeds on Disposal

9. Property Plant and Equipment

11. Current Liabilities

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