文档介绍：Intermediate Accounting
By Vivian 周卉
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Tutorial Class 5
Review for Final Exam
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Final Exam Key points
accounts
-Consolidated income statement and balance sheet
for fixed assets:
- Purpose and methods of depreciation, advantage and disadvantage of different methods.
-Caculation of new depn expense after the change in useful life or revaluation of fixed asset
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Final Exam Key points
calculation,
-Advantage and disadvantage of EPS.
-Weighted average no. of shares calculation
of fixed assets or goodwill:
-Definition of impairment loss;
-In what situation will a company carry out an impairment review and how
-Allocation of impairment loss
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1. Consolidated Accounts
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Example 1
Beijing plc owns 80% of the shares of Zhuhai plc. The purchase consideration was £450,000. The retained earnings of Zhuhai plc at the date of acquisition were £350,000.
The summarised financial statements of the two companies for the year ended 31 December 2008 were as follows:
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INCOME STATEMENTS as at 31 Dec. 2008
Beijing
Zhuhai
£’000
£’000
Revenue
3300
2100
Cost of sales
1600
1200
Gross profit
1700
900
Admin expense
80
50
Selling expense
820
250
Profit before tax
800
600
Income tax
400
300
Profit after tax for the year
400
300
Retained Earnings b/fwd
710
450
Retained Earnings c/fwd
1110
750
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Beijing
Zhuhai
Non-current Assets
1360
1200
Investment in Zhuhai
450
Inventory
200
100
Receivables
250
100
Amounts receivable from Beijing
-
30
Cash at Bank
100
20
Total Assets
2360
1450
Share Capital (£1 ordinary)
550
100
Reserves
1110
750
Equity
1610
850
Debenture Loans
300
300
Current Liabilities:
Payables
173
200
Amounts payable to Zhuhai
27
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Payables
200
100
2360
1450
BALANCE SHEET as at 31 Dec. 2008
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Additio