ExpertACCA · Question 50 · Preparing Simple Consolidated Financial Statements
Section B - Case 1: Group Consolidations
Scenario: Nebula Aerospace
On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000.
During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end.
Assuming Nebula Aerospace's own retained earnings at 31 December 20X5 are $800,000, and ignoring the goodwill impairment from the previous questions, calculate the Consolidated Retained Earnings at 31 December 20X5. (Enter the number only)
Section B - Case 1: Group Consolidations
Scenario: Nebula Aerospace
On 1 January 20X5, Nebula Aerospace acquired 80% of the equity share capital of Comet Components. The purchase consideration was $500,000 cash. At the date of acquisition, Comet's share capital was $100,000 and its retained earnings were $250,000. The fair value of the non-controlling interest (NCI) at acquisition was $110,000.
During the year ended 31 December 20X5, Comet made a profit of $80,000. Nebula sold goods to Comet for $50,000 at a 25% mark-up on cost. Half of these goods remain in Comet's inventory at year-end. Comet owes Nebula $20,000 at year-end.
Assuming Nebula Aerospace's own retained earnings at 31 December 20X5 are $800,000, and ignoring the goodwill impairment from the previous questions, calculate the Consolidated Retained Earnings at 31 December 20X5. (Enter the number only)
How to approach this question
Full Answer
Common mistakes
Practice the full ACCA FA — Financial Accounting Practice Exam 5
65 questions · hints · full answers · grading