Consolidation worksheet Huma Ltd purchased 100% of the outstanding ordinary shares of Sima Ltd on 31...

Consolidation worksheet

Huma Ltd purchased 100% of the outstanding ordinary shares of Sima Ltd on 31 December, 2013 at a cost of $196,000. At that date the Share Capital of Sima Ltd was $50,000. The Retained Profits were $86,000. Payment was made in cash $196,000.

The fair market value of the fixed assets of Sima Ltd. was $160,000, the cost was $140,000 and the accumulated depreciation was $40,000. Other assets in the accounts of Sima Ltd. had a fair value equal to the carrying amount. Fixed Assets in both companies are depreciated over 10 years’ straight line.

Consolidation worksheet for 31 December 2014
	Huma Ltd	Sima Ltd	Dr	Ref	Cr	Group
Sales	300,000 cr	100,000 cr
Cost of Sales	200,000 dr	40,000 dr
General Expenses	50,000 dr	20,000 dr
Depreciation	30,000 dr	14,000 dr
Tax Expense	6,000 dr	7,800 dr
Dividend Income	5,000 cr	--
Dividend Accrued/expensed	10,000 dr	5,000 dr
Retained Profits for the year 2014	9,000 cr	13,200 cr
Fixed Assets	300,000 dr	140,000 dr
Accumulated Depreciation	130,000 cr	54,000 cr
Investment in Sima Ltd	196,000 dr	--
Goodwill	--	--
Inventory	55,000 dr	20,000 dr
Current Assets	--	6,000 dr
Account Receivable – Sima Ltd.	25,000 dr	--
Dividend Receivable	5,000 dr	--
Cash	54,000 dr	67,200 dr
	505,000	179,200
Account Payable - Huma Ltd.	--	25,000 cr
Deferred Tax Liability	--	--
Dividend Payable	10,000 cr	5,000 cr
Share Capital	100,000 cr	50,000 cr
Asset Revaluation Reserve	--	--
Opening Retained Profits (1 Jan. 2014)	386,000 cr	86,000 cr
Retained Profits for the year 2014	9,000 cr	13,200 cr
	505,000	179,200

Required:

Complete the consolidation worksheet at 31 December, 2014. Assets are to be revalued in the accounts of the group, not in the subsidiary. Goodwill is not impaired. The rate of taxation is 30%.

Please help me to complete this table above.

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Expert Solution

ekkarill92 answered 1 year ago

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