Homework answers / question archive / The following information represents the abridged financial statements of Mega Ltd and its subsidiary Ultra Ltd: Statement of financial position as at 31 December 2018           Mega Ltd Ultra Ltd ASSETS             Property, plant and equipment          270 000        340 000 Investment in Ultra Ltd: 48 000 shares at fair value        350 000                    -   (cost: N$ 330 000)           Trade receivables                 80 000           23 500 Inventories              350 000        218 000 Bank                   65 000                    -                 Total assets           1 115 000        581 500               EQUITY AND LIABILITIES         Share capital              400 000        240 000 Mark-to-market reserve               20 000           10 000 Retained earnings              375 000        240 000 Long-term borrowings               43 000           21 000 Trade and other payables            277 000           23 500 Bank overdraft                          -             47 000               Total equity and liabilities         1 115 000        581 500   Statement of profit or loss and other comprehensive income for the year ended 31 December 2018           Mega Ltd Ultra Ltd Revenue                      927 000          1 628 000 Cost of sales                   -472 000            -725 000 Gross profit                    455 000             903 000 Other expenses                   -287 100            -472 000 Dividend received from Ultra Ltd                   94 000                         -                 Profit before tax                    261 900             431 000 Income tax expense                   -198 000            -128 000 Profit for the year                       63 900             303 000               Other comprehensive income         Items that will not be reclassified to profit or loss     Mark-to-market reserve                       4 000                  1 000               TOTAL COMPREHENSIVE INCOME FOR THE YEAR                 67 900             304 000   Extract from the Statement of changes in equity for the year ended 31 December 2018     Mark-to-market reserve Retained earnings   Mega Ltd Ultra Ltd Mega Ltd Ultra Ltd Balance at 1 Jan 2018          15 000               8 000              215 000             170 000 Changes in equity for 2018         Total comprehensive income for the year:         Profit for the year                     63 900             303 000 Other comprehensive income for the year            4 000               1 000     Dividends                 -108 000            -120 000           Balance at 31 December 2018          19 000               9 000              170 900 353 000 Additional information: On 1 January 2018, the date on which Ultra Ltd acquired the interest in Mega Ltd, the equity of Mega Ltd consisted of: Share capital                                      N$ 260 000 Mark-to-market reserve                 N$ 3 000 Revaluation reserve                         N$ 7 000 Retained earnings                            N$ 135 000 Ultra Ltd elected to measure non-controlling interests at fair value at the acquisition date

The following information represents the abridged financial statements of Mega Ltd and its subsidiary Ultra Ltd: Statement of financial position as at 31 December 2018           Mega Ltd Ultra Ltd ASSETS             Property, plant and equipment          270 000        340 000 Investment in Ultra Ltd: 48 000 shares at fair value        350 000                    -   (cost: N$ 330 000)           Trade receivables                 80 000           23 500 Inventories              350 000        218 000 Bank                   65 000                    -                 Total assets           1 115 000        581 500               EQUITY AND LIABILITIES         Share capital              400 000        240 000 Mark-to-market reserve               20 000           10 000 Retained earnings              375 000        240 000 Long-term borrowings               43 000           21 000 Trade and other payables            277 000           23 500 Bank overdraft                          -             47 000               Total equity and liabilities         1 115 000        581 500   Statement of profit or loss and other comprehensive income for the year ended 31 December 2018           Mega Ltd Ultra Ltd Revenue                      927 000          1 628 000 Cost of sales                   -472 000            -725 000 Gross profit                    455 000             903 000 Other expenses                   -287 100            -472 000 Dividend received from Ultra Ltd                   94 000                         -                 Profit before tax                    261 900             431 000 Income tax expense                   -198 000            -128 000 Profit for the year                       63 900             303 000               Other comprehensive income         Items that will not be reclassified to profit or loss     Mark-to-market reserve                       4 000                  1 000               TOTAL COMPREHENSIVE INCOME FOR THE YEAR                 67 900             304 000   Extract from the Statement of changes in equity for the year ended 31 December 2018     Mark-to-market reserve Retained earnings   Mega Ltd Ultra Ltd Mega Ltd Ultra Ltd Balance at 1 Jan 2018          15 000               8 000              215 000             170 000 Changes in equity for 2018         Total comprehensive income for the year:         Profit for the year                     63 900             303 000 Other comprehensive income for the year            4 000               1 000     Dividends                 -108 000            -120 000           Balance at 31 December 2018          19 000               9 000              170 900 353 000 Additional information: On 1 January 2018, the date on which Ultra Ltd acquired the interest in Mega Ltd, the equity of Mega Ltd consisted of: Share capital                                      N$ 260 000 Mark-to-market reserve                 N$ 3 000 Revaluation reserve                         N$ 7 000 Retained earnings                            N$ 135 000 Ultra Ltd elected to measure non-controlling interests at fair value at the acquisition date

Accounting

Share With

---

The following information represents the abridged financial statements of Mega Ltd and its subsidiary Ultra Ltd:

Statement of financial position as at 31 December 2018
					Mega Ltd	Ultra Ltd
ASSETS
Property, plant and equipment					270 000	340 000
Investment in Ultra Ltd: 48 000 shares at fair value					350 000	-
(cost: N$ 330 000)
Trade receivables					80 000	23 500
Inventories					350 000	218 000
Bank					65 000	-
Total assets					1 115 000	581 500
EQUITY AND LIABILITIES
Share capital					400 000	240 000
Mark-to-market reserve					20 000	10 000
Retained earnings					375 000	240 000
Long-term borrowings					43 000	21 000
Trade and other payables					277 000	23 500
Bank overdraft					-	47 000
Total equity and liabilities					1 115 000	581 500

 

Statement of profit or loss and other comprehensive income for the year ended
31 December 2018
					Mega Ltd	Ultra Ltd
Revenue					927 000	1 628 000
Cost of sales					-472 000	-725 000
Gross profit					455 000	903 000
Other expenses					-287 100	-472 000
Dividend received from Ultra Ltd					94 000	-
Profit before tax					261 900	431 000
Income tax expense					-198 000	-128 000
Profit for the year					63 900	303 000
Other comprehensive income
Items that will not be reclassified to profit or loss
Mark-to-market reserve					4 000	1 000
TOTAL COMPREHENSIVE INCOME FOR THE YEAR					67 900	304 000

 

Extract from the Statement of changes in equity for the year ended 31 December 2018
	Mark-to-market reserve		Retained earnings
	Mega Ltd	Ultra Ltd	Mega Ltd	Ultra Ltd
Balance at 1 Jan 2018	15 000	8 000	215 000	170 000
Changes in equity for 2018
Total comprehensive income for the year:
Profit for the year			63 900	303 000
Other comprehensive income for the year	4 000	1 000
Dividends			-108 000	-120 000
Balance at 31 December 2018	19 000	9 000	170 900	353 000

Additional information:

On 1 January 2018, the date on which Ultra Ltd acquired the interest in Mega Ltd, the equity of Mega Ltd consisted of:

Share capital                                      N$ 260 000

Mark-to-market reserve                 N$ 3 000

Revaluation reserve                         N$ 7 000

Retained earnings                            N$ 135 000

Ultra Ltd elected to measure non-controlling interests at fair value at the acquisition date. On 1 January 2018, the fair value of each non-controlling interest’s share was N$8,50 per share, based on market prices.

Ultra Ltd classified the investment in Ultra Ltd under IFRS 9 in its separate financial statements and recognised fair value adjustments in a mark-to-market reserve (other comprehensive income). Ignore tax implications.

REQUIRED

Prepare consolidated financial statements for the Mega Ltd Group for the reporting period ended 31 December 2018.