The Blackbeard Company Ltd provided the following information in regard to its operations for the year ended 30 June 2014:

Cash Book Summary
Opening balance	$20,000	Accounts Payable	$40,000
Accounts receivable	100,000	Bills Payable (suppliers)	20,000
Bills Receivable (suppliers)	20,000	Interest paid	60,000
Debenture Issue	400,000	Operating expenses	180,000
Dividends received	20,000	Salaries & wages	200,000
Interest received	40,000	Current tax payable	80,000
Motor vehicles	60,000	Plant & machinery	100,000
Share capital	200,000	Dividend paid	120,000
		Balance c/d	60,000
	860,000		860,000
Balance b/d	60,000

Required:

(a) Net cash used in operating activities; (b) Net cash used in investing activities; (c) Net cash from financing activities;

(d) Net increase/(decrease) in cash and cash equivalents.

Please use the following format

*Statement of Cash Flows for Blackbeard Company*
*For the Financial Year Ended 30 June 2014*
( i ) Cash flows from Operating Activities	Inflows/	Inflows/
	(Outflows)	(Outflows)










Net cash used in operating activities

( ii ) Cash flows from Investing Activities


Net cash used in Investing Activities

( iii ) Cash flows from Financing Activities

violetcoyote644

On 1 July 2017, Panda Ltd acquired all the issued shares ofSmarty Ltd. Panda Ltd paid $250,000 more than the equity itacquired in the fair value of Smarty Ltdâs net assets. At the dateof acquisition, the shareholderâs equity of S

On 1 July 2017, Panda Ltd acquired all the issued shares ofSmarty Ltd. Panda Ltd paid $250,000 more than the equity itacquired in the fair value of Smarty Ltdâs net assets. At the dateof acquisition, the shareholderâs equity of Smarty Ltd was asfollows.

$

Share capital

100,000

Retained earnings

175,000

Total

275,000

All the assets and liabilities of Smarty Ltd were recorded atamounts equal to their fair values at the acquisition date, exceptfor some assets detailed below.

Remaining useful life

Cost

Carrying amount

Fair value

$

Plant

5 years

180,000

90,000

120,000

Computer equipment

5 years

90,000

40,000

60,000

Required:

Prepare the acquisition analysis at 1 July 2017.
Prepare the consolidation worksheet entries for Panda Ltdâs groupat 1 July 2017.
Prepare the consolidation worksheet entries for Panda Ltdâs groupat 30 June 2018.

Question 1

Max. marks allocated

Acquisition analysis

3

Consolidation entries at 1 July 2017

6

Consolidation entries at 30 June 2018

10

Presentation

1

Total

20

Question 2 [35 marks]

Topic 2: Consolidation: Intra-group transactions

On 1 July 2015, Ping Pong Ltd acquired all the issued shares ofSing Song Ltd. At the date of acquisition, the shareholdersâ equityof Sing Song Ltd consisted of share capital $120,000; generalreserve $25,000 and retained earnings $55,000. The identifiable netassets of Sing Song Ltd were recorded at amounts equal to theirfair values, except for the following assets:

Carrying amount

Fair value

$

Land

100,000

130,000

Inventories

78,500

86,100

Machinery (cost $86,000)

52,000

56,000

Vehicles (cost $58,000)

47,000

53,000

The assets of Sing Song Ltd at acquisition date includedgoodwill recorded at $15,000 arising from a business combinationtransaction in 2011. As at the date of acquisition, the vehiclesand machinery were expected to have a further useful life of 6 and8 years respectively, with benefits to be received evenly overthose periods. Inventories on hand on 1 July 2015 was all sold by31 January 2016. The land owned at 1 July 2015 was sold inSeptember 2016 for $150,000. The machinery on hand at 1 July 2015was sold on 1 January 2018 for $38,000.

Adjustments for the differences between carrying amount and fairvalues of assets and liabilities on hand at acquisition date arerecognised on consolidation. When assets are sold or derecognised,any related valuation reserves are transferred to retainedearnings.

At 1 July 2015, Sing Song Ltd owned but had not recorded aninternally generated brand name, an identifiable asset included aspart of the business combination transaction. This brand name wasconsidered by Ping Pong Ltd to have a fair value of $29,000 and anindefinite useful life. An impairment test conducted with respectto the brand name on 30 June 2018 concluded that its recoverableamount at that date was $2,000 less than its carrying amount.

In June 2017, Sing Song Ltd paid a share dividend worth $20,000from the general reserve on hand at 1 July 2015.

The trial balances of both companies at 30 June 2018 showed thefollowing balances:

Ping Pong Ltd

Sing Song Ltd

Dr ($)

Cr ($)

Dr ($)

Cr ($)

Sales revenue

450,000

320,000

Dividend revenue

17,000

-

Other income

11,400

17,000

Proceeds on sale of equipment

18,000

-

Proceeds on sale of machinery

-

38,000

Cost of sales

210,000

192,550

Income tax expense

30,000

32,000

Depreciation and other expenses

39,000

36,000

Carrying amount of equipment sold

21,000

-

Carrying amount of machinery sold

-

30,500

Dividend paid

10,000

5,000

Dividend declared

20,000

12,000

Transfer to general reserve

10,000

5,000

Share capital

200,000

140,000

General reserve

35,000

10,000

Retained earnings (1 July 2017)

51,300

67,500

Accounts payable

69,500

36,000

Loan payable (due 30 June 2022)

25,000

15,000

Dividend payable

20,000

12,000

Provisions

12,500

9,300

Current tax liability

43,000

34,000

Deferred tax liability

11,800

5,000

Accumulated depreciation-vehicles

16,400

60,000

Accumulated depreciation-equipment

-

34,500

8%Debentures (matures 30 June 2021)

25,000

-

Cash

2,500

1,250

Receivables

27,000

13,000

Inventories

39,700

24,500

Other current assets

15,200

8,200

Deferred tax assets

7,500

3,500

Vehicles

88,000

158,000

Equipment

-

42,000

Land

140,000

180,000

Financial assets

68,000

14,800

Goodwill

28,000

15,000

Shares in Sing Song Ltd

250,000

-

Debentures in Ping Pong Ltd

-

25,000

1,005,900

798,300

Additional information:

On 1 January 2018, Ping Pong Ltd sold an item of equipment toSing Song Ltd for $18,000. The equipment had a carrying amount atthe date of sale of $21,000. Both companies depreciate equipment at20% on a straight line basis.
On 1 May 2017, Sing Song Ltd sold a machine to Ping Pong Ltd for$7,800. The machine had a carrying amount of $7,000 at the date ofsale. Ping Pong Ltd recorded the machine as inventories. Theinventories item was sold to an external party in November 2017 for$8,200.
All interests on the 8% debentures has been paid and brought toaccount in the records of both companies.
During the 2017-2018 financial year, Ping Pong Ltd sold inventoriesto Sing Song Ltd for $75,000. The cost of these inventories to SingSong Ltd was $70,000. Of these inventories, 25% is still on hand at30 June 2018.
The transfer to the general reserve recorded by Sing Song Ltd inthe current year was from retained earnings recorded at 1 July2015.
The tax rate is 30%.

Required:

Prepare an acquisition analysis.
Prepare the consolidation worksheet entries necessary to preparethe consolidated financial statements for the year ending 30 June2018 for the group comprising Ping Pong Ltd and Sing Song Ltd.

Note: you are not required to prepare the consolidationworksheet and the consolidated financial statements.

marty Ltd was as follows.

	$
Share capital	100,000
Retained earnings	175,000
Total	275,000

All the assets and liabilities of Smarty Ltd were recorded atamounts equal to their fair values at the acquisition date, exceptfor some assets detailed below.

	Remaining useful life	Cost	Carrying amount	Fair value
		$	$	$
Plant	5 years	180,000	90,000	120,000
Computer equipment	5 years	90,000	40,000	60,000

Required:

Prepare the acquisition analysis at 1 July 2017.

Prepare the consolidation worksheet entries for Panda Ltdâsgroup at 1 July 2017.

Prepare the consolidation worksheet entries for Panda Ltdâsgroup at 30 June 2018.

Question 1	Max. marks allocated
Acquisition analysis	3
Consolidation entries at 1 July 2017	6
Consolidation entries at 30 June 2018	10
Presentation	1
Total	20

Question 2 [35 marks]

Topic 2: Consolidation: Intra-grouptransactions

On 1 July 2015, Ping Pong Ltd acquired all the issued shares ofSing Song Ltd. At the date of acquisition, the shareholdersâ equityof Sing Song Ltd consisted of share capital $120,000; generalreserve $25,000 and retained earnings $55,000. The identifiable netassets of Sing Song Ltd were recorded at amounts equal to theirfair values, except for the following assets:

	Carrying amount	Fair value
	$	$
Land	100,000	130,000
Inventories	78,500	86,100
Machinery (cost $86,000)	52,000	56,000
Vehicles (cost $58,000)	47,000	53,000

The assets of Sing Song Ltd at acquisition date includedgoodwill recorded at $15,000 arising from a business combinationtransaction in 2011. As at the date of acquisition, the vehiclesand machinery were expected to have a further useful life of 6 and8 years respectively, with benefits to be received evenly overthose periods. Inventories on hand on 1 July 2015 was all sold by31 January 2016. The land owned at 1 July 2015 was sold inSeptember 2016 for $150,000. The machinery on hand at 1 July 2015was sold on 1 January 2018 for $38,000.

Adjustments for the differences between carrying amount and fairvalues of assets and liabilities on hand at acquisition date arerecognised on consolidation. When assets are sold or derecognised,any related valuation reserves are transferred to retainedearnings.

At 1 July 2015, Sing Song Ltd owned but had not recorded aninternally generated brand name, an identifiable asset included aspart of the business combination transaction. This brand name wasconsidered by Ping Pong Ltd to have a fair value of $29,000 and anindefinite useful life. An impairment test conducted with respectto the brand name on 30 June 2018 concluded that its recoverableamount at that date was $2,000 less than its carrying amount.

In June 2017, Sing Song Ltd paid a share dividend worth $20,000from the general reserve on hand at 1 July 2015.

The trial balances of both companies at 30 June 2018 showed thefollowing balances:

	Ping Pong Ltd		Sing Song Ltd
	Dr ($)	Cr ($)	Dr ($)	Cr ($)
Sales revenue		450,000		320,000
Dividend revenue		17,000		-
Other income		11,400		17,000
Proceeds on sale of equipment		18,000		-
Proceeds on sale of machinery		-		38,000
Cost of sales	210,000		192,550
Income tax expense	30,000		32,000
Depreciation and other expenses	39,000		36,000
Carrying amount of equipment sold	21,000		-
Carrying amount of machinery sold	-		30,500
Dividend paid	10,000		5,000
Dividend declared	20,000		12,000
Transfer to general reserve	10,000		5,000
Share capital		200,000		140,000
General reserve		35,000		10,000
Retained earnings (1 July 2017)		51,300		67,500
Accounts payable		69,500		36,000
Loan payable (due 30 June 2022)		25,000		15,000
Dividend payable		20,000		12,000
Provisions		12,500		9,300
Current tax liability		43,000		34,000
Deferred tax liability		11,800		5,000
Accumulated depreciation-vehicles		16,400		60,000
Accumulated depreciation-equipment		-		34,500
8%Debentures (matures 30 June 2021)		25,000		-
Cash	2,500		1,250
Receivables	27,000		13,000
Inventories	39,700		24,500
Other current assets	15,200		8,200
Deferred tax assets	7,500		3,500
Vehicles	88,000		158,000
Equipment	-		42,000
Land	140,000		180,000
Financial assets	68,000		14,800
Goodwill	28,000		15,000
Shares in Sing Song Ltd	250,000		-
Debentures in Ping Pong Ltd	-		25,000
	1,005,900	1,005,900	798,300	798,300

Additional information:

On 1 January 2018, Ping Pong Ltd sold an item of equipment toSing Song Ltd for $18,000. The equipment had a carrying amount atthe date of sale of $21,000. Both companies depreciate equipment at20% on a straight line basis.

On 1 May 2017, Sing Song Ltd sold a machine to Ping Pong Ltd for$7,800. The machine had a carrying amount of $7,000 at the date ofsale. Ping Pong Ltd recorded the machine as inventories. Theinventories item was sold to an external party in November 2017 for$8,200.

All interests on the 8% debentures has been paid and brought toaccount in the records of both companies.

During the 2017-2018 financial year, Ping Pong Ltd soldinventories to Sing Song Ltd for $75,000. The cost of theseinventories to Sing Song Ltd was $70,000. Of these inventories, 25%is still on hand at 30 June 2018.

The transfer to the general reserve recorded by Sing Song Ltd inthe current year was from retained earnings recorded at 1 July2015.

The tax rate is 30%.

Required:

Prepare an acquisition analysis.

Prepare the consolidation worksheet entries necessary to preparethe consolidated financial statements for the year ending 30 June2018 for the group comprising Ping Pong Ltd and Sing Song Ltd.

Note: you are not required to prepare the consolidationworksheet and the consolidated financial statements.

lilachorse999

Topic 2: Consolidation: Intra-grouptransactions

On 1 July 2015, Ping Pong Ltd acquired all the issued shares ofSing Song Ltd. At the date of acquisition, the shareholdersâ equityof Sing Song Ltd consisted of share capital $120,000; generalreserve $25,000 and retained earnings $55,000. The identifiable netassets of Sing Song Ltd were recorded at amounts equal to theirfair values, except for the following assets:

	Carrying amount	Fair value
	$	$
Land	100,000	130,000
Inventories	78,500	86,100
Machinery (cost $86,000)	52,000	56,000
Vehicles (cost $58,000)	47,000	53,000

The assets of Sing Song Ltd at acquisition date includedgoodwill recorded at $15,000 arising from a business combinationtransaction in 2011. As at the date of acquisition, the vehiclesand machinery were expected to have a further useful life of 6 and8 years respectively, with benefits to be received evenly overthose periods. Inventories on hand on 1 July 2015 was all sold by31 January 2016. The land owned at 1 July 2015 was sold inSeptember 2016 for $150,000. The machinery on hand at 1 July 2015was sold on 1 January 2018 for $38,000.

Adjustments for the differences between carrying amount and fairvalues of assets and liabilities on hand at acquisition date arerecognised on consolidation. When assets are sold or derecognised,any related valuation reserves are transferred to retainedearnings.

At 1 July 2015, Sing Song Ltd owned but had not recorded aninternally generated brand name, an identifiable asset included aspart of the business combination transaction. This brand name wasconsidered by Ping Pong Ltd to have a fair value of $29,000 and anindefinite useful life. An impairment test conducted with respectto the brand name on 30 June 2018 concluded that its recoverableamount at that date was $2,000 less than its carrying amount.

In June 2017, Sing Song Ltd paid a share dividend worth $20,000from the general reserve on hand at 1 July 2015.

The trial balances of both companies at 30 June 2018 showed thefollowing balances:

	Ping Pong Ltd		Sing Song Ltd
	Dr ($)	Cr ($)	Dr ($)	Cr ($)
Sales revenue		450,000		320,000
Dividend revenue		17,000		-
Other income		11,400		17,000
Proceeds on sale of equipment		18,000		-
Proceeds on sale of machinery		-		38,000
Cost of sales	210,000		192,550
Income tax expense	30,000		32,000
Depreciation and other expenses	39,000		36,000
Carrying amount of equipment sold	21,000		-
Carrying amount of machinery sold	-		30,500
Dividend paid	10,000		5,000
Dividend declared	20,000		12,000
Transfer to general reserve	10,000		5,000
Share capital		200,000		140,000
General reserve		35,000		10,000
Retained earnings (1 July 2017)		51,300		67,500
Accounts payable		69,500		36,000
Loan payable (due 30 June 2022)		25,000		15,000
Dividend payable		20,000		12,000
Provisions		12,500		9,300
Current tax liability		43,000		34,000
Deferred tax liability		11,800		5,000
Accumulated depreciation-vehicles		16,400		60,000
Accumulated depreciation-equipment		-		34,500
8%Debentures (matures 30 June 2021)		25,000		-
Cash	2,500		1,250
Receivables	27,000		13,000
Inventories	39,700		24,500
Other current assets	15,200		8,200
Deferred tax assets	7,500		3,500
Vehicles	88,000		158,000
Equipment	-		42,000
Land	140,000		180,000
Financial assets	68,000		14,800
Goodwill	28,000		15,000
Shares in Sing Song Ltd	250,000		-
Debentures in Ping Pong Ltd	-		25,000
	1,005,900	1,005,900	798,300	798,300

Additional information:

On 1 January 2018, Ping Pong Ltd sold an item of equipment toSing Song Ltd for $18,000. The equipment had a carrying amount atthe date of sale of $21,000. Both companies depreciate equipment at20% on a straight line basis.

On 1 May 2017, Sing Song Ltd sold a machine to Ping Pong Ltd for$7,800. The machine had a carrying amount of $7,000 at the date ofsale. Ping Pong Ltd recorded the machine as inventories. Theinventories item was sold to an external party in November 2017 for$8,200.

All interests on the 8% debentures has been paid and brought toaccount in the records of both companies.

During the 2017-2018 financial year, Ping Pong Ltd soldinventories to Sing Song Ltd for $75,000. The cost of theseinventories to Sing Song Ltd was $70,000. Of these inventories, 25%is still on hand at 30 June 2018.

The transfer to the general reserve recorded by Sing Song Ltd inthe current year was from retained earnings recorded at 1 July2015.

The tax rate is 30%.

Required:

Prepare an acquisition analysis.

Prepare the consolidation worksheet entries necessary to preparethe consolidated financial statements for the year ending 30 June2018 for the group comprising Ping Pong Ltd and Sing Song Ltd.

Note: you are not required to prepare the consolidationworksheet and the consolidated financial statements.

orchiddeer92

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