Page 516 - F2 Integrated Workbook STUDENT 2019

F2: Advanced Financial Reporting

13.3 Doug purchased 80% of Pug in 20X5 for $5,000,000. The net assets of Pug had
a fair value of $3,500,000 at that date.

Pug purchased 40% of Buzz on 1st Jan 20X6. The cost of the investment was
$2,500,000. At the same date, Doug purchased 20% of the ordinary share
capital of Buzz for $1,000,000. Buzz’s net asset at this date had a fair value of
$1,250,000.

Doug uses the proportionate method for valuing goodwill for all acquisitions.

What is the goodwill to be calculated for Pug and Buzz? Options are given
in $000s.

Pug Buzz
A 2,200 2,350

B 2,200 2,850

C 2,900 1,650

D 2,900 2,850

13.4 Blob acquired 80% of the ordinary share capital of Thing on 1st Jan 20X7.
Thing already owns 80% of Fly as at the 1st Jan 20X7.

Blob acquired 40% of the shares in Stuff on 30th June 20X7. Stuff is treated as
an associate in the group accounts.

Extracts from the statements of financial position as at the year-end
31st December 20X7 are shown below:
Blob Thing Fly Stuff

$000 $000 $000 $000
Current assets
Inventory 278 82.5 150 45

What is the inventory balance for the Blob group for the year ended 31st
December 20X7? Answers are shown in $000’s

A 360.5

B 510.5

C 533

D 555.5

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