Nursery Plc. acquired 350 million ordinary shares of Crèche Plc. on 1st January, 20v8 when the
retained earnings of Crèche stood at N79,500.
The respective statements of financial position of the
two entities as at 31st December, 20v8 are as follows
The following additional information is relevant
1.
The
fair value of the non-controlling interest is estimated to be N120million
2.
Nursery
Plc. has only paid a sum of N320,000,000 as its investment fund to Crèche Plc.
and the balance of N180,000,000 captured as deferred consideration in the book
of Nursery Plc. is expected to be paid by the end of the following year. The
effective discount rate for this deferment is 12% (0.7972) for the two-year
period.
3.
An
item of non – depreciable asset of had a fair value of N26million higher than
its book carrying amount in the records of Crèche Plc. but no adjustment has
been made in the books.
Required
Prepare the statement of financial position of Nursery
Plc Group.
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