Question 1 Parrotfish Limited acquired 60% of the issued shares of Shrimpfish Li

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Question 1 Parrotfish Limited acquired 60% of the issued shares of Shrimpfish Limited for $9,500,000 on January 1, 2014 Shrimpfish Limited on January 1, 2014 were as follows: S10,000,000 $4,000,000 $14,000,000 The shareholders' equity o Issued share capital Retained profits On January 1, 2015, Parrotfish Limited acquired 25% of the issued shares of Angelfish Limited for $2,800,000 when the retained profits of Angelfish Limited was S1,200,000. Additional information (a) At the date of acquisition, the carrying amounts of all identifiable asset and liabilities of Shrimpfish Limited were equal to their fair value, except for a piece of land and a piece of equipment owned by Shrimpfish Limited. The fair value of the equipment was $800,000 in excess of its carrying amount. Shrimpfish Limited used the historical cost model for its non-current assets. The equipment had remaining useful life of 4 years. This revaluation was not reflected in the books of Shrimpfish Limited. (b) For the purpose of acquisition, a piece of land of Shrimpfish Limited was revalued to give a valuation of $600,000 in excess of its carrying value. However, this valuation had not been reflected in the books of Shrimpfish Limited at December 31, 2016. It was the group policy not to charge depreciation on land (e) On January 1, 2016, a motor van owned by Parrotfish Limited was sold to Shrimpfish Limited. The information about the sales was as follows: Selling price Original cost in the books of Parrotfish Limited Accumulated depreciation in the books of Parrotfish Limited Remaining useful life for Shrimpfish Limited at transaction date $300,000 $600,000 $400,000 6 yearS The depreciation expense was included in other operating expenses. (d) The difference in current account between Parrotfish Limited and Shrimpfish Limited was caused by cash in transit. (e) During 2016, Shrimpfish Limited sold goods to Parrotfish Limited. The information

Explanation / Answer

$0 P/FISH S/FISH A/FISH TOTAL REV 12000 15000 14000 41000 COS 8000 5000 8000 21000 GP 4000 10000 6000 20000 OTHER INCOME 325 0 0 325 4325 10000 6000 20325 DISTR COST -100 -400 -500 -1000 ADMIN COST -300 -400 -600 -1300 OTHER OPE COST -200 -500 -500 -1200 -600 -1300 -1600 -3500 PROFIT B4 TAX 3725 8700 4400 16825 TAX 300 300 300 900 PAT 3425 8400 4100 15925 MINORITY INTEREST/ SHARE OF PROFIT 0 3360 3075 6435 3425 5040 1025 9490

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