uity shares in Frais on 1 January 20X1. During entory to Frais at a sales price of £50,000. None d a margin of 20%. ofit or loss for the two entities are shown below Frais £000
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- P acquired 70% of S in 20X8. The statements of profit or loss of the two companies for the year ended 31 December 20X9 showed revenues: P $100000 S $70000 During November 20X9, S sold goods to P for $8000. None of these items remained in inventory at the end of year. What is the consolidated revenue for P for the year ended 31 December 20X9?Pea acquired 75% of the equity shares of Hion on 31 August 20X9. The statement of profit or loss extracts for the year ended 31 December 20X9 showed: Pea Hion Revenue 240,000 148,800 Cost of sales 60,000 38,400 During the post-acquisition period, sales of $6,000 were made by Pea to Hion. Half of these goods remained in the inventory at the year-end. Pole had made a mark-up on cost of 25% on these sales. What is the group cost of sales for Pea Group for the year ended 31 December 20X9? A. $133,400 B. $132,200 C. $83,400 D. $67,400Paneer owns 30% of Lassi and has done so for many years. During the year ended 31 December 20X1, Lassi made a net profit of £1.5m. Lassi sold inventory costing £1m to Paneer at a mark-up of 50%. 40% of the goods are still in Paneer's inventory at the year end. What is the "Income from associates" to be shown in the consolidated Statement of profit or loss for the year ended 31 December 20X1? a. £1,300,000 b. £450,000 C. £360,000 d. £390,000 O e. £150,000 O f. £300,000 g. £250,000
- Braviary Corp. acquired a 70% interest in Vullaby Company in 20A. For the year ended December 31, 20A and 20B, Vullaby Company reported an income of P160,000 and P180,000, respectively. During 20A, Vullaby sold merchandise to Braviary Corp. for P20,000 at a profit of P4,000. The merchandise was later resold by Braviary Corp. to outsider for P30,000 during 20B. For consolidation purposes, what is the minority interest's share of Vullaby's net income for 20A and 20B, respectively. * A. P49,200 and P52,800 B. Answer not given C. P53,200 and P50,000 D. P46,800 and P55,200 E. P48,000 and P54,000(a) Jessica Ltd sold inventory during the current period to its wholly owned subsidiary, Amelie Ltd, for $15 000.These items previously cost Jessica Ltd $12 000. Amelie Ltd subsequently sold half the items to Ningbo Ltd for$8000. The tax rate is 30%. The group accountant for Jessica Ltd, Li Chen, maintains that the appropriateconsolidation adjustment entries are as follows: Sales Dr $15,000 Cost of Sales Cr $13,000 Inventory Cr $2,000 Deferred Tax Asset Dr $300 Income Tax Expense Cr $300 Required:(i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basisthe correct adjustment entry.(ii)Determine the consolidation worksheet entries in the following year, assuming the inventoryhas been –sold, and explain the adjustments on a line-by-line basis.On January 1, Year 2, PAT Ltd. acquired 90% of SAT Inc. when SAT's retained earnings were $1,000,000. There was no acquisition differential. PAT accounts for its investment under the cost method. SAT sells inventory to PAT on a regular basis at a markup of 30% of selling price. The intercompany sales were $160,000 in Year 2 and $190,000 in Year 3. The total amount owing by PAT related to these intercompany sales was $60,000 at the end of Year 2 and $50,000 at the end of Year 3. On January 1, Year 3, the inventory of PAT contained goods purchased from SAT amounting to $70,000, while the December 31, Year 3, inventory contained goods purchased from SAT amounting to $80,000. Both companies pay income tax at the rate of 40%. Selected account balances from the records of PAT and SAT for the year ended December 31, Year 3, were as follows: Inventory Accounts Payable Retained Earnings, Beg. of Year Sales Cost of Sales Income Tax Expense PAT $510,000 700,000 2,500,000 4,100,000 3,200,000…
- Jarvis owns 30% of McLintock. During the year to 31 December 20X4 McLintock sold $2 million of goods to Jarvis, of which 40% were still held in inventory by Jarvis at the year end. McLintock applies a mark-up of 25% on all goods sold. What effect would the above transactions have on group inventory at 31 December 20X4? A Debit group inventory $48,000 B Debit group inventory $160,000 C Credit group inventory $48,000 D No effect on group inventoryBasil acquired 60% of Parsley on 1 March 20X9. In September 20X9 Basil sold $46,000 worth of goods to Parsley. Basil applies a 30% mark-up to all its sales. 25% of these goods were still held in inventory by Parsley at the end of the year. An extract from the draft statements of profit or loss of Basil and Parsley at 31 December 20X9 is: Parsley $ 421,500 Basil $ 955,000 Revenue Cost of sales (407,300) 547,700 (214,600) 206,900 Gross profit All revenue and costs arise evenly throughout the year. What will be shown as gross profit in the consolidated statement of profit or loss of Basil for the year ended 31 December 20X9?(a) Jessica Ltd sold inventory during the current period to its wholly owned subsidiary, Amelie Ltd, for $15 000.These items previously cost Jessica Ltd $12 000. Amelie Ltd subsequently sold half the items to Ningbo Ltd for$8000. The tax rate is 30%. The group accountant for Jessica Ltd, Li Chen, maintains that the appropriateconsolidation adjustment entries are as follows: Dr Sales 15,000 Cr Cost of Sales 13,000Cr Inventory 2,000 Dr Deferred Tax Asset 300Cr Income Tax Exp 300Required(i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basisthe correct adjustment entry. (ii)Determine the consolidation worksheet entries in the following year, assuming the inventoryhas been –sold, and explain the adjustments on a line-by-line basis. (b) On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000 when its’ carrying value in Liala Ltd bookwas $600000 (costs $900000, accumulated depreciation $300000). This…
- Fairbanks Corporation purchased 400 ordinary shares of Sherman Inc. as a tradinginvestment for £13,200. During the year, Sherman paid a cash dividend of £3.25 per share. Atyear-end, Sherman shares were selling for £34.50 per share.Prepare Fairbanks' journal entries to record:(a) the purchase of the investment,(b) the dividends received, and(c) the fair value adjustment.Positive ltd acquired an 80% stake in Strong Ltd in 20x1. During the year 20x2, the following inter-company transactions took place. • Positive extended a loan of $200,000 to Strong on 1 April 20x2 with an interest rate of 4% per annum. Interest for the year ended 31 December 20x2 had not been paid but were recorded in the books of both companies appropriately.• Strong sold some inventory to Positive for $80,000 at a margin of 5%. Half of these goods were still unsold at the end of the year. As at 31 December 20x2, Positive’s records showed that it owed Strong $20,000 but the latter’s financial statements indicated a receivable of $30,000. The difference had been attributed to a payment made by Positive that was still being processed by the bank. Required: Prepare the consolidation journal entries for the elimination of the above inter-company transactions for the year ended 31 December 20x2.Jessica Ltd sold inventory during the current period to its wholly owned subsidiary, Amelie Ltd, for $15 000. These items previously cost Jessica Ltd $12 000. Amelie Ltd subsequently sold half the items to Ningbo Ltd for $8000. The tax rate is 30%. The group accountant for Jessica Ltd, Li Chen, maintains that the appropriate consolidation adjustment entries are as follows: Sales. Dr15 000Cost of Sales Cr 13 000 Inventory Cr 2 000 DeferredTaxAsset Dr 300 Income Tax ExpenseCr 300 Required: (i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basis the correct adjustment entry. (ii)Determine the consolidation worksheet entries in the following year, assuming the inventory has been –sold, and explain the adjustments on a line-by-line basis.