Page 394 - FR Integrated Workbook 2018-19

Chapter 24

Example 6 cont.

Solution

Non-current assets $
3
4
Investments (8,000 – 3,500 – 300 ) 4,200
Current assets
1
2
Receivables (1,400 + 650 – 100 – 400 ) 1,550
1
Bank (600 + 150 + 100 ) 850
Non-current liabilities
4
8% loan stock (4,000 + 500 – 300 ) 4,200
Current liabilities
2
Payables (2,800 + 1,300 – 400 ) 3,700

1 Cash in transit, calculated as the difference between the payables and
receivables balances, $500 – $400 = $100.

2 Remove the balanced receivables and payables.

3 Remove the cost of investment, recorded in the goodwill calculation.

4 P’s investment in S’s loan stock is $500 × 60% = $300.

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