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Question Hinge Basic Group

Hinge Co acquired 80% of Singe Co on April 1, 20X5. To prepare a consolidated statement of financial position as of December 31, 20X5 for Hinge Co, non-controlling interest is valued based on net assets and profits are assumed to have accrued evenly over the year. The consolidated statement will combine the assets and liabilities of both companies as of December 31, 20X5, including valuing Hinge Co's investment in Singe Co based on the underlying net assets.

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174 views1 page

Question Hinge Basic Group

Hinge Co acquired 80% of Singe Co on April 1, 20X5. To prepare a consolidated statement of financial position as of December 31, 20X5 for Hinge Co, non-controlling interest is valued based on net assets and profits are assumed to have accrued evenly over the year. The consolidated statement will combine the assets and liabilities of both companies as of December 31, 20X5, including valuing Hinge Co's investment in Singe Co based on the underlying net assets.

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john ashley
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Learning outcomes Al

Hinge Co acquired 80% of the ordinary shares of Singe Co on 1April 20X5 .On 31 December
20X4 Singe Co's accounts showed a share premium account of $4,000 and retained earnings of
$15,000.The statements of financial position of the two companies at 31 December 20X5 are set out
below. Neither company has paid any dividends during the year. Non-controlling interest at
acquisition should be valued at its proportionate share of net assets.
You are required to prepare the consolidated statement of financial position of Hinge Co at 31
December 20X5. You should assume that profits have accrued evenly over the year to 31
December 20X5. There has been no impairment of goodwill.
HINGE CO
STATEMENT OF FINANCIA L POSITION AS AT 31 DECEMBER 20X5
$ $
Assets
Non-current assets
Property, plant and equipment 32,000
16,000 ordinary shares of 50c each in Singe Co 50,000
82,000
Current assets 85,000
Total assets 167,000
Equity and liabilities
Equity
Ordinary shares of $1 each 100,000
Share premium account 7,000
Retained earnings 40,000
147,000
Current liabilities 20,000
Total equity and liabilities 167,000

SINGE CO
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 20X5
$ $
Assets
Property, plant and equipment 30,000
Current assets 43 ,000
Total assets 73,000

$ $
Equity and liabilities
Equity
20,000 ordinary shares of 50c 10,000
each Share premium account 4,000
Retained earnings 39,000 ,./

53,000
Current liabilities 20,000
Total equity and 73,000
liabilities
,J

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