Evaluate the income statement for the year, Cost Accounting

Assignment Help:

DF is describing its consolidated financial declaration for the year ended 31 December 2009. DF has a numerous investments in other entities. Some of these investments are provided in detail below:

Investment in AB

When the book value of the net assets was $5.8 million, DF obtained 90% of the issued ordinary share capital of AB on 1 July 2009 for $6 million. The reasonable value of these net assets was estimated at $6.8 million at the date of acquirement. The diversity between the fair value and book value of the net assets related to depreciable possessions with a remaining useful life at the date of acquisition of 40 years.

Investment in GH

On 1 January 2008 for $2 million DF acquired 40% of the issued ordinary share capital of GH, when the book value of the net assets was $5.5 million. The fair value of these net assets was estimated at $6 million at the date of acquirement.

Investment in JK

At the date of acquirement of AB, AB held 65% of the issued ordinary share capital of JK. The operations of JK do not fit within the considered plans of DF and so the directors plan to sell this investment. The investment is currently being vigorously marketed with a view to selling it within the next 4 months.

Investment in LM

On 1 January 2004 for $1 million, DF acquired 15% of the issued ordinary share capital of LM.DF acquired a further 40% of issued ordinary share capital for $4.5 million, on 1 October 2009. The fair value of the net assets on 1 January 2004 was $8 million and at 1 October 2009 was $12 million. The earlier held interest had a fair value on 1 October 2009 of $1.7 million.

The group policy is to value non-controlling interest at the date of gaining at the proportionate share of the fair value of the net assets.

Required:

(a) Describe the basis on which each of the investments should be accounted for in the consolidated monetary statements of the DF Group for the year ended 31 December 2009 (calculations are not required).

(b) Explain in brief the impact of the investment in AB, in the consolidated income statement for the year ended 31December 2009.


Related Discussions:- Evaluate the income statement for the year

Stages of implementation of zero based budgeting, Stages of Implementation ...

Stages of Implementation of Zero Based Budgeting 1. Definition of decision package. It is the comprehensive description of the organizations activities or functions.

Which of the following are relevant in choosing, A company is considering t...

A company is considering the following alternatives: Alternative 1 Alternative 2 Revenues $240,000 240,000 Variable costs 120,000 140,000 Fixed costs 70,000 70,000 Which of the fol

Fcff and fcfe, Show the effect of an increase in each of the items listed b...

Show the effect of an increase in each of the items listed below on the FCFF and FCFE. Suppose a $100 increase in every case and a 40 percent tax rate a.    Net income b.    Cas

Labour cost, labour cost related case study with solution

labour cost related case study with solution

Draw the demand curve of marginal benefit, The total demand (marginal benef...

The total demand (marginal benefit) curve for visiting Yosemite is as follows: Price = 5000-10*NumberOfTrips -10*TonsOfVisibleTrash. a. Suppose the quantity of trash=100 tons. D

Overhead variances, Overhead Variances This explains how the variable ...

Overhead Variances This explains how the variable overhead total variance and the fixed overhead total variances calculated. You can recall the overheads refer to production c

Marginal cost, contribution per unit 8 fixed cost=800.find B.E.P?

contribution per unit 8 fixed cost=800.find B.E.P?

Cost component, Identify the individual cost components and the total cost ...

Identify the individual cost components and the total cost of delivering the product from supplier to retailer.   Identify each cost in terms of the incremental addition to the pro

Capital initial investment, Now along with the illustration of Ramsons at h...

Now along with the illustration of Ramsons at hand, this is not tough for us to understand that Ramsons have invested the 'money to make money'. Where has Ramsons invested the mone

Absorption costing and marginal costing, Absorption Costing and Marginal Co...

Absorption Costing and Marginal Costing Product costs are costs identified along with goods produced or purchased for resale. That costs are initially identified like part of

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd