BDA ASSIGMENT 13TH JULY 2025

Q1 Which of the following definitions is NOT included within the definition of control per IFRS 10 Consolidated Financial Statements?

Q2
2. Pamela acquired 80% of the share capital of Samantha on 1 January 20X1. Part of the purchase consideration was KSH 200,000 cash to be paid on 1 January 20X4. The applicable cost of capital is 10%.
What will the deferred consideration liability be at 31 December 20X2?

Q3 Philip acquired 85% of the share capital of Stanley on 1 October 20X1. The profit for the year ended 31 December 20X1 for Stanley was KSH 36,000. Profits are deemed to accrue evenly over the year. At 31 December 20X1 Stanley’s statement of financial position showed:
Equity share capital: KSH 200,000
Retained earnings: KSH 180,000
What were the net assets of Stanley on acquisition? KSH ____________

Q4 On 30 June 20X4 GHI acquired 800,000 of JKL’s 1 million shares.
GHI issued 3 shares for every 4 shares acquired in JKL. On 30 June 20X4 the market price of a GHI share was KSH 3.80 and the market price of a JKL share was KSH 3.
GHI agreed to pay KSH 550,000 in cash to the existing shareholders on 30 June 20X5. GHI’s borrowing rate was 10% per annum.
GHI paid professional fees of KSH 100,000 for advice on the acquisition.
What is the cost of investment that will be used in the goodwill calculation in the consolidated financial statements of GHI?
____________

Q5 MNO has a 75% owned subsidiary PQR. During the year MNO sold inventory to PQR for an invoiced price of KSH 800,000. PQR has since sold 75% of that inventory on to third parties. The sale was at a mark‐up of 25% on cost to MNO. PQR is the only subsidiary of MNO.
What is the adjustment to inventory that would be included in the consolidated statement of financial position of MNO at the year‐end resulting from this sale?

Q6 West has a 75% subsidiary Life and is preparing its consolidated statement of financial position as at 31 December 20X6. The carrying amount of property, plant and equipment in the two companies at that date is as follows:
West: KSH 300,000
Life: KSH 60,000
On 1 January 20X6 Life had transferred some property to West for KSH 40,000. At the date of transfer the property, which had cost KSH 42,000, had a carrying amount of KSH 30,000 and a remaining useful life of five years.
What is the carrying amount of property, plant and equipment in the consolidated statement of financial position of West as at 31 December 20X6?
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Q7 Which TWO of the following situations are unlikely to represent control over an investee?