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AnswersFundamentals Level Skills Module, Paper F7 (INT)Financial Reporting (International) december 2012 Answers1(a)Viagem: Consolidated goodwill on acquisition of Greca as at 1 January 2012 $ 000$ 000Investment at costShares (10,000 x 90% x 2/3 x $6 50) 39,000Deferred consideration (9,000 x $1 76/1 1) 14,400Non-controlling interest (10,000 x 10% x $2 50)2,500 55,900Net assets (based on equity) of Greca as at 1 January 2012Equity shares10,000Retained earnings b/f at 1 October 201135,000Earnings 1 October 2011 to acquisition (6,200 x 3/12)1,550Fair value adjustments: plant1,800contingent liability recognised(450) Net assets at date of acquisition(47,900) Consolidated goodwill8,000 (b)Viagem: Consolidated income statement for the year ended 30 September 2012 $ 000Revenue (64,600 + (38,000 x 9/12) 7,200 intra-group sales)85,900Cost of sales (working)(64,250) Gross profit21,650Distribution costs (1,600 + (1,800 x 9/12))(2,950)Administrative expenses (3,800 + (2,400 x 9/12) + 2,000 goodwill impairment)(7,600)Income from associate (2,000 x 40% based on underlying earnings) 800Finance costs (420 + (14,400 x 10% x 9/12 re deferred consideration))(1,500) Profit before tax10,400Income tax expense (2,800 + (1,600 x 9/12))(4,000) Profit for the year6,400 Profi

Fundamentals Level – Skills Module, Paper F7 (INT) Financial Reporting (International) December 2012 Answers 1(a)Viagem: Consolidated goodwill on acquisition of Greca as at 1 January 2012

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