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    BACC1 Group Work-Fafa and Blewu

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    isaacbediako82
    The document contains two questions regarding financial reporting and consolidation. Question 1 asks about the fair valuation of purchase consideration for the acquisition of Fafa & Blewu, including cash paid, deferred consideration, contingent consideration, and shares exchanged. It also provides calculations of goodwill using the full and partial methods. Question 2 provides financial information for Brend Group and its subsidiary Stretch, including calculations of goodwill, non-controlling interest, and consolidated retained earnings.

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    BACC1 Group Work-Fafa and Blewu

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    isaacbediako82
    9 views3 pages
    The document contains two questions regarding financial reporting and consolidation. Question 1 asks about the fair valuation of purchase consideration for the acquisition of Fafa & Blewu, including cash paid, deferred consideration, contingent consideration, and shares exchanged. It also provides calculations of goodwill using the full and partial methods. Question 2 provides financial information for Brend Group and its subsidiary Stretch, including calculations of goodwill, non-controlling interest, and consolidated retained earnings.

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    The document contains two questions regarding financial reporting and consolidation. Question 1 asks about the fair valuation of purchase consideration for the acquisition of Fafa & Blewu, including cash paid, deferred consideration, contingent consideration, and shares exchanged. It also provides calculations of goodwill using the full and partial methods. Question 2 provides financial information for Brend Group and its subsidiary Stretch, including calculations of goodwill, non-controlling interest, and consolidated retained earnings.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    9 views3 pages

    BACC1 Group Work-Fafa and Blewu

    Uploaded by

    isaacbediako82
    The document contains two questions regarding financial reporting and consolidation. Question 1 asks about the fair valuation of purchase consideration for the acquisition of Fafa & Blewu, including cash paid, deferred consideration, contingent consideration, and shares exchanged. It also provides calculations of goodwill using the full and partial methods. Question 2 provides financial information for Brend Group and its subsidiary Stretch, including calculations of goodwill, non-controlling interest, and consolidated retained earnings.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    UNIVERSITY OF CAPE COAST

    COLLEGE OF HUMANITIES AND LEGAL STUDIES


    SCHOOL OF BUSINESS
    DEPARTMENT OF ACCOUNTING
    FIRST SEMESTER-2023/2024 ACADEMIC YEAR
    ACC401 ADVANCED FINANCIAL REPORTING I
    BACC1 – CLASS GROUP WORK

    Question 1 – Fair Valuation of Purchase Consideration


    Fair Valuation of Purchase Consideration - Fafa & Blewu GH¢
    Cash 1,500,000
    Deferred Consideration (882,000x1/1.1^2) 728,926
    Contingent Consideration (100,000x1/1.1^2) 82,645
    Share for share exchange (3,000,000/3x1xGhc3) 3,000,000
    Cost of Investment 5,311,570

    Calculation of Goodwill - Full Method


    Cost of investment 5,311,570
    Fair value of NCI (1,000,000xGhc2) 2,000,000
    Net Assets (4,000,000+2,500,000) - 6,500,000
    Goodwill at acquisition 811,570

    Calculation of Goodwill - Partial Method


    Cost of investment 5,311,570
    NCI Proportion of NAA (25%x6,500,000) 1,625,000
    Net Assets (4,000,000+2,500,000) - 6,500,000
    Goodwill at acquisition 436,570

    1
    Question 2 – Brend and Stretch

    Brend Group
    Consolidated Statement of Financial Position as at 31/12/21
    GH¢
    Tangible assets (2,600,000+1,200,000+60,000) 3,860,000
    Goodwill (W3) 30,000
    Current assets (1,500,000+500,000) 2,000,000
    5,890,000

    Equity and Liabilities


    Share capital 1,600,000
    Group Retained Earnings (W5) 3,656,000
    Non-controlling interest (W4) 334,000
    Non-current liabilities
    Current liabilities (200,000+100,000) 300,000
    5,890,000

    Consolidation Workings
    1. Structure - Brend/Parent =80% ; NCI = 20%

    2. Net Assets Acquired Acquistion Date Reporting Date


    GH¢ GH¢
    Share capital 1,000,000 1,000,000
    Retained earnings 400,000 600,000
    Fair value-Non-current assets 60,000 60,000
    Total Net Assets 1,460,000 1,660,000
    Post-acquisition Profit (PAP) 200,000

    3. Calculation of Goodwill
    Cost of investment 1,200,000
    Fair value of NCI 295,000
    Total Net Assets Acquired-at acquistion date - 1,460,000
    Goodwill at acquistion 35,000
    Impairment of goodwill - 5,000
    Goodwill at reporting 30,000

    2
    4. Non-controlling Interest
    Fair value of NCI at acquisition 295,000
    NCI share of post-acquisition profit (20% x 200,000) 40,000
    Share of Impairment of goodwill (20% x 5,000) - 1,000
    NCI to Conso SFP 334,000

    5. Group Retained Earnings


    Parent 100% retained earnings 3,500,000
    Parent share of Post-acquisition profits (80% x 200,000) 160,000
    Share of Impairment of goodwill (80% x 5,000) - 4,000
    GRE to Conso SFP 3,656,000

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