Ogre Ltd acquires all the shares of Elf Ltd on 1 July 2011. The financial statements for Ogre and Elf at 30 June 2012 are provided below.
Reconciliation of opening and closing retained earnings
Ogre Ltd Elf Ltd
($000) ($000)
Sales revenue 2000 610
Cost of goods sold (800) (240)
Other expenses (300) (70)
Profit 900 300
Retained earnings opening balance 1100 500
Retained earnings closing balance 2000 800
Statements of financial position
Shareholders equity
Retained earnings 2000 800
Share capital 1100 350
Current Liabilities
Accounts payable 700 150
Non-current liabilities
Loans 1100 700
4900 2000
Current assets
Cash 150 200
Accounts receivable 450 250
Non-current assets
Land 1200 750
Plant 2600 1000
Less accumulated depreciation (600) (200)
2000 800
Investment in Elf Ltd 1100
4900 2000
Additional Information
- Ogre acquired Elf on 1 July 2011 for $1.1 million in cash.
- The directors of Ogre consider that in the year to 30 June 2012 the value of goodwill had been impaired by an amount of $20,000.
- There are no intra-group transactions
- The tax rate is 30%
- On the date at which Ogre Ltd acquires Elf Ltd the carrying value and the fair value of the assets of Elf Ltd are;
Carrying Value Fair value
($000) ($000)
Cash 150 150
Accounts receivable 200 200
Land 750 800
Plant (cost $1,000,000
Accumulated depreciation $800,000) 800 900
1900 2050
No revaluations are undertaken in Ogre Ltd's accounts before consolidation.
- At the date of acquisition of Elf Ltd, Elf Ltd's liabilities amounted to $1.05 million and there re no contingent liabilities
- The plant in Elf Ltd is expected to have a remaining useful life of ten years from 1 July 2011 and no residual value.
Required
Provide;
a) the consolidation worksheet for Ogre Ltd and its controlled entity for the period ended 30 June 2012-12 and
b) the consolidated statement of financial position of Ogre Ltd and its controlled entity as at 30 June 2012.