[F7]ACCA每日一练F7 (UK) 答案回复可见

1 On 1 August 2007 Patronic purchased 18 million of a total of 24 million equity shares in Sardonic. The acquisition
was through a share exchange of two shares in Patronic for every three shares in Sardonic. Both companies have
shares with a par value of £1 each. The market price of Patronic’s shares at 1 August 2007 was £5·75 per share.
Patronic will also pay in cash on 31 July 2009 (two years after acquisition) £2·42 per acquired share of Sardonic.
Patronic’s cost of capital is 10% per annum. The reserves of Sardonic on 1 April 2007 were £69 million.
Patronic has held an investment of 30% of the equity shares in Acerbic for many years.
The summarised profit and loss accounts for the three companies for the year ended 31 March 2008 are:
Patronic Sardonic Acerbic
£’000 £’000 £’000
Turnover 150,000 78,000 80,000
Cost of sales (94,000) (51,000) (60,000)
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Gross profit 56,000 27,000 20,000
Distribution costs (7,400) (3,000) (3,500)
Administrative expenses (12,500) (6,000) (6,500)
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Operating profit 36,100 18,000 10,000
Finance costs (note (ii)) (2,000) (900) nil
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Profit before tax 34,100 17,100 10,000
Tax (10,400) (3,600) (4,000)
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Profit for the year 23,700 13,500 6,000
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The following information is relevant:
(i) The fair values of the net assets of Sardonic at the date of acquisition were equal to their carrying amounts with
the exception of property and plant. Property and plant had fair values of £4·1 million and £2·4 million
respectively in excess of their carrying amounts. The increase in the fair value of the property would create
additional depreciation of £200,000 in the consolidated financial statements in the post acquisition period to
31 March 2008 and the plant had a remaining life of four years (straight-line depreciation) at the date of
acquisition of Sardonic. All depreciation is treated as part of cost of sales.
The fair values have not been reflected in Sardonic’s financial statements.
No fair value adjustments were required on the acquisition of Acerbic.
(ii) The finance costs of Patronic do not include the finance cost on the deferred consideration.
(iii) Prior to its acquisition, Sardonic had been a good customer of Patronic. In the year to 31 March 2008, Patronic
sold goods at a selling price of £1·25 million per month to Sardonic both before and after its acquisition. Patronic
made a profit of 20% on the cost of these sales. At 31 March 2008 Sardonic still held stock of £3 million (at
cost to Sardonic) of goods purchased in the post acquisition period from Patronic.
(iv) The goodwill of Sardonic should be amortised over a nine-year life with time apportionment in the year of
acquisition. The goodwill in Acerbic was deemed to have an indefinite life and was not impaired at 31 March
2008.
(v) All items in the above profit and loss accounts are deemed to accrue evenly over the year.
(vi) Ignore deferred tax.

Required:
(a) Calculate the goodwill arising on the acquisition of Sardonic at 1 August 2007. (6 marks)
(b) Prepare the consolidated profit and loss account for the Patronic Group for the year ended 31 March 2008.
Note: assume that the investment in Acerbic has been accounted for using the equity method since its
acquisition. (15 marks)
(c) At 31 March 2008 the other equity shares (70%) in Acerbic were owned by many separate investors. Shortly
after this date Spekulate (a company unrelated to Patronic) accumulated a 60% interest in Acerbic by buying
shares from the other shareholders. In May 2008 a meeting of the board of directors of Acerbic was held at which
Patronic lost its seat on Acerbic’s board.
Required:
Explain, with reasons, the accounting treatment Patronic should adopt for its investment in Acerbic when it
prepares its financial statements for the year ending 31 March 2009. (4 marks)
(25 marks)