Acca financial Accounting (FA) Study Text ac ca (FA)

What was the fair value of consideration paid by P Co to acquire 

S Co? 

$________  

114  P Co recently acquired an 80% interest in the 30,000 ordinary shares of 

S Co. The consideration provided by P Co consisted of an immediate cash 

payment of $2.50 per share acquired, along with a share exchange of 

5 shares issued for every three shares acquired. At the date of acquisition, 

the fair value of a $1 ordinary share in P Co was $4 and the fair value of a 

$1 ordinary share in S Co was $2.  

What was the fair value of consideration paid by P Co to acquire 

S Co? 

$________  

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PRACTICE QUESTIONS 

498

 

KAPLAN PUBLISHING

 

Consolidated statement of profit or loss 

115  X owns 60% of the equity share capital of Y and 40% of the equity share 

capital of Z. The statement of profit or loss of the three entities showed the 

following revenue for the year ended 31 August 20X7: 

$m

 X 

16 

 Y 

8 

 Z 

7 

During the year X sold goods to Y and Z for $2 million and $1 million 

respectively. All goods were sold on to third parties by Y and Z by the end 

of the year.