The following are the balance sheets of Jamaica Limited, Barbados Limited and Trinidad Limited, as at the 31 December 2019. The three companies are major players in the retail food industry. Jamaica Limited acquired 70% of the shares in Barbados Limited on January 1 2017 when the reserve balances were as follows: General reserves: $10,000 and retained earnings $12 000. The acquisition of Barbados Limited consisted of a cash payment of $600,000 to be settled in four years' time (cost of capital 8%) and a share exchange of 4 shares in Jamaica Limited for every 5 shares acquired in Barbados Limited. The market price for a Jamaica Limited share at that date was $2.80. To date the acquisition of Barbados Limited has not been recorded. On 1 July 2020 Jamaica Limited acquired 40,000 shares in Trinidad Limited for cash at a price of $2.20 per share. For the year ended 31 December 2019 Trinidad Limited reported a profit of $72,000 (assume profit accrued evenly during the year). Non-Current Assets Land Equipment Less Depreciation Me Vehicles Less Depreciation Investments Trinidad Ltd Current Assets Inventory Accounts receivable Prepayments Bank & cash EQUITY & LIABILITES $1 Ordinary shares Reserves General reserves Retained earnings Balance Sheet as at 31 December 2019 Jamaica Ltd $ Non-Current Liabilities 4% Debentures Current Liabilities Trade Payables Taxation 660, 000 24,000 550, 000 50,000 88,000 $ 145,000 173,000 1,200,000 336,000 300,000 1,836 000 445,000 320, 000 12,000 209,000 1,074, 000 2.910.000 1,200,000 170, 000 246, 000 976, 000 318,000 2.910.000 Barbados Ltd S S 100,000 10,000 000 40 000 25,000 40,000 7,000 40,000 8,000 38,000 300,000 90,000 160 000 550 000 112 000 662 000 200,000 30,000 24, 000 362,000 46.000 662.000 Trinidad Ltd S 70,000 10,000 30.000 15,000 8,000 2,000 13.000 15,000 7,000 $ 170,000 60,000 90,000 320,000 38,000 358,000 100,000 0 36,000 200,000 22,000 358.000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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ADDITIONAL INFORMATION
1.
2.
3.
4.
5.
6.
At the date of the acquisition the directors of Jamaica Limited determined that the fair
market value of land owned by Barbados Limited was $240 000, however no adjustments
were made.
At December 31 2019, the goodwill acquired was impaired by $30,000.
During the year Jamaica Limited sold goods to Barbados Limited for $80,000, after
charging a mark-up of 20%. At 31 December 2018 only 70% of the goods were sold.
During the year Barbados Limited transferred a motor vehicle to Jamaica Limited at a price
of $190,000, the motor vehicle was new and cost Barbados Limited $80,000. Jamaica
Limited depreciated the motor vehicle at 10% of the cost to them.
Non-Controlling Interest should be valued at $1.70 per share at acquisition date.
At the 31 December 2019 Jamaica Limited showed accounts receivable from Barbados
Limited of $12,000. The books of Barbados Limited showed accounts payable to Jamaica
Limited of $9,000. The difference was due to cash paid by Barbados Limited of $3,000
which was not received by Jamaica Limited until 10 January 2020.
Required:
Prepare the Consolidated Balance Sheet for the Jamaica Limited Group as at 31 December 2022
Transcribed Image Text:ADDITIONAL INFORMATION 1. 2. 3. 4. 5. 6. At the date of the acquisition the directors of Jamaica Limited determined that the fair market value of land owned by Barbados Limited was $240 000, however no adjustments were made. At December 31 2019, the goodwill acquired was impaired by $30,000. During the year Jamaica Limited sold goods to Barbados Limited for $80,000, after charging a mark-up of 20%. At 31 December 2018 only 70% of the goods were sold. During the year Barbados Limited transferred a motor vehicle to Jamaica Limited at a price of $190,000, the motor vehicle was new and cost Barbados Limited $80,000. Jamaica Limited depreciated the motor vehicle at 10% of the cost to them. Non-Controlling Interest should be valued at $1.70 per share at acquisition date. At the 31 December 2019 Jamaica Limited showed accounts receivable from Barbados Limited of $12,000. The books of Barbados Limited showed accounts payable to Jamaica Limited of $9,000. The difference was due to cash paid by Barbados Limited of $3,000 which was not received by Jamaica Limited until 10 January 2020. Required: Prepare the Consolidated Balance Sheet for the Jamaica Limited Group as at 31 December 2022
The following are the balance sheets of Jamaica Limited, Barbados Limited and Trinidad Limited,
as at the 31 December 2019. The three companies are major players in the retail food industry.
Jamaica Limited acquired 70% of the shares in Barbados Limited on January 1 2017 when the
reserve balances were as follows: General reserves: $10,000 and retained earnings $12 000.
The acquisition of Barbados Limited consisted of a cash payment of $600,000 to be settled in four
years' time (cost of capital 8%) and a share exchange of 4 shares in Jamaica Limited for every 5
shares acquired in Barbados Limited. The market price for a Jamaica Limited share at that date
was $2.80. To date the acquisition of Barbados Limited has not been recorded.
On 1 July 2020 Jamaica Limited acquired 40,000 shares in Trinidad Limited for cash at a price of
$2.20 per share. For the year ended 31 December 2019 Trinidad Limited reported a profit of
$72,000 (assume profit accrued evenly during the year).
Non-Current Assets
Land
Equipment
Less Depreciation
Motor Vehicles
Less Depreciation
Investments
Trinidad Ltd
Current Assets
Inventory
Accounts receivable
Prepayments
Bank & cash
EQUITY & LIABILITES
$1 Ordinary shares
Reserves
General reserves
Retained earnings
Non-Current
Liabilities
Balance Sheet as at 31 December 2019
Jamaica Ltd
$
4% Debentures
Current Liabilities
Trade Payables
Taxation
660, 000
24,000
550,000
50,000
88,000
$
145, 000
173,000
1,200,000
336, 000
300,000
1,836 000
445, 000
320, 000
12, 000
209.000 1,074, 000
2.910.000
1,200,000
170,000
246, 000
976, 000
318,000
2.910,000
Barbados Ltd
$
$
100,000
10,000
200 000
40 000
25,000
40,000
7,000
40,000
8,000
38,000
300,000
70,000
90,000 10,000
120,000
30,000
160 000
550 000
112 000
662 000
200,000
30, 000
24, 000
362, 000
Trinidad Ltd
S
46,000
662,000
15,000
8,000
2,000
13.000
15,000
7.000
$
170,000
60,000
90,000
320,000
38,000
358,000
100,000
0
36,000
200,000
22,000
358,000
Transcribed Image Text:The following are the balance sheets of Jamaica Limited, Barbados Limited and Trinidad Limited, as at the 31 December 2019. The three companies are major players in the retail food industry. Jamaica Limited acquired 70% of the shares in Barbados Limited on January 1 2017 when the reserve balances were as follows: General reserves: $10,000 and retained earnings $12 000. The acquisition of Barbados Limited consisted of a cash payment of $600,000 to be settled in four years' time (cost of capital 8%) and a share exchange of 4 shares in Jamaica Limited for every 5 shares acquired in Barbados Limited. The market price for a Jamaica Limited share at that date was $2.80. To date the acquisition of Barbados Limited has not been recorded. On 1 July 2020 Jamaica Limited acquired 40,000 shares in Trinidad Limited for cash at a price of $2.20 per share. For the year ended 31 December 2019 Trinidad Limited reported a profit of $72,000 (assume profit accrued evenly during the year). Non-Current Assets Land Equipment Less Depreciation Motor Vehicles Less Depreciation Investments Trinidad Ltd Current Assets Inventory Accounts receivable Prepayments Bank & cash EQUITY & LIABILITES $1 Ordinary shares Reserves General reserves Retained earnings Non-Current Liabilities Balance Sheet as at 31 December 2019 Jamaica Ltd $ 4% Debentures Current Liabilities Trade Payables Taxation 660, 000 24,000 550,000 50,000 88,000 $ 145, 000 173,000 1,200,000 336, 000 300,000 1,836 000 445, 000 320, 000 12, 000 209.000 1,074, 000 2.910.000 1,200,000 170,000 246, 000 976, 000 318,000 2.910,000 Barbados Ltd $ $ 100,000 10,000 200 000 40 000 25,000 40,000 7,000 40,000 8,000 38,000 300,000 70,000 90,000 10,000 120,000 30,000 160 000 550 000 112 000 662 000 200,000 30, 000 24, 000 362, 000 Trinidad Ltd S 46,000 662,000 15,000 8,000 2,000 13.000 15,000 7.000 $ 170,000 60,000 90,000 320,000 38,000 358,000 100,000 0 36,000 200,000 22,000 358,000
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