3. Set out below are the draft income statements of P and its subsidiary S for the year ended 31 December 20X7. On the 1 January 20X6 P purchased 75% of the ordinary shares in S. Revenue Cost of sales and expenses Gross profit Operating expenses Profit from operations Finance costs Profit before taxation Tax Profit for the year P $000 300 (180) 120 (47) 73 73 (25) 48 S $000 150 (70) 80 P values non-controlling interest using the fair value method. (23) 57 (2) 55 (16) 39 During the year S sold goods to P for $20,000, making a mark up of one third. Only 20% of these goods were sold before the end of the year, the rest were still in inventory. Prepare the consolidated income statement

3. Set out below are the draft income statements of P and its subsidiary S for the year ended 31 December 20X7. On the 1 January 20X6 P purchased 75% of the ordinary shares in S. Revenue Cost of sales and expenses Gross profit Operating expenses Profit from operations Finance costs Profit before taxation Tax Profit for the year P $000 300 (180) 120 (47) 73 73 (25) 48 S $000 150 (70) 80 P values non-controlling interest using the fair value method. (23) 57 (2) 55 (16) 39 During the year S sold goods to P for $20,000, making a mark up of one third. Only 20% of these goods were sold before the end of the year, the rest were still in inventory. Prepare the consolidated income statement

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: H plc owns 80% of the the voting shares of S plc. S plc is a subsidiary of H plc. The most recent…

A: Consolidated Accounting Statements: The accounting statement which are formed by holding and…

Q: Assad Corporation repurchases 10,000 of its shares for $12 per share. The shares were originally…

A: The shares are issued in order to arrange the capital for the business of the company.

Q: 17. Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring…

A: Detailed Explanation1. Journal Entry for Pab Corporation:Pab Corporation is transferring assets and…

Q: Plug Corporation holds 80 percent of Socket Company's common stock. The following balance sheet data…

A: Basic earnings per share (EPS) is a financial term that calculates the amount of profit given to…

Q: 3. Bach Co. acquired a 20% interest in C Major Co. on December 31, 20x3 for P630,000. During 20x4, C…

A: The dividend is the distribution of profit among the shareholders of the company. A dividend…

Q: None

A: Earnings per share is a financial ratio that indicates a company’s ability to earn revenue for its…

Q: (a) Prepare a schedule of changes to the acquisition differential for the four year period ending…

A: Consolidated Net Income : After deducting all costs, taxes, and other charges, a company's…

Q: Calculate share of profit of the members of the parent entity and of minority interests if Alpha Ltd…

A: Minority interests are between the range of twenty percent and thirty percent of the equity of the…

Q: Sant Company purchased 30 percent of the outstanding shares of Temp Company for $87,000 on January…

A: The income statement shows the financial position of the company whether the business is making a…

Q: Prepare a consolidated statement of financial position as at 31 December 20X1.

Question

3. Set out below are the draft income
statements of P and its subsidiary S for the
year ended 31 December 20X7.
On the 1 January 20X6 P purchased 75% of
the ordinary shares in S.
Revenue
Cost of sales and expenses
Gross profit
Operating expenses
Profit from operations
Finance costs
Profit before taxation
Tax
Profit for the year
P
$000
300
(180)
120
(47)
73
73
(25)
48
S
$000
150
(70)
80
P values non-controlling interest using the
fair value method.
(23)
57
(2)
55
(16)
39
During the year S sold goods to P for
$20,000, making a mark up of one third. Only
20% of these goods were sold before the end
of the year, the rest were still in inventory.
Prepare the consolidated income statement
for the year ended 31 December 20X7

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

If P. company paid $360000 to acquire a part of S. company common stocks and if the positive difference balance between the total implied value and the total amount of S. company equities was $130000 and the total amount of the book value of S. company equities was :$350000, then answer (16-20) The percentage of controlling.16 = interest in S. company
ss
Alford Company and its 80 percent-owned subsidiary, Knight, have the following income statements for 2021: Knight $ (230,000) Alford $ (500,000) 300,000 40,000 140,000 10,000 20,000 20,000 (30,000) (36,200) $ (206, 200) Revenues Cost of goods sold Depreciation and amortization Other expenses Gain on sale of equipment Equity in earnings of Knight Net income 0 0 $ (60,000) Additional Information for 2021 • Intra-entity inventory transfers during the year amounted to $90,000. All intra-entity transfers were downstream from Alford to Knight. • Intra-entity gross profits in inventory at January 1 were $6,000, but at December 31, they are $9,000. • Annual excess amortization expense resulting from the acquisition is $11,000. • Knight paid dividends totaling $20,000. • The noncontrolling interest's share of the subsidiary's income is $9,800. . During the year, consolidated inventory rose by $11,000 while accounts receivable and accounts payable declined by $8,000 and $6,000, respectively. Net…
During the current year, Swallow Corporation, a calendar year C corporation, has the following transactions: Income from operations $660,000 Expenses from operations 760,000 Dividends received from Brown Corporation 240,000 Click here to view the dividend received deduction table. Question Content Area a. Swallow Corporation owns 12% of Brown Corporation's stock. How much is Swallow's taxable income or NOL for the year? Swallow's taxable income after deducting the dividends received deduction is $fill in the blank fd6fd0f8303e049_2 . Feedback Area Feedback The purpose of the dividends received deduction is to mitigate multiple taxation of corporate income. Without the deduction, income paid to a corporation in the form of a dividend would be taxed to the recipient corporation with no corresponding deduction to the distributing corporation. Later, when the recipient corporation paid the income to its shareholders, the income would again be subject to taxation with no corresponding…
A owns 80% of B & 40% of C, purchased when B's reserve was £6,000, & C's £1,000. B's net assets at acquisition were £25,000. Balance Sheets at 31-Dec-21 Investment in B Investment in C Other Net Assets ₤1NV Shares Reserves Profit/Loss Required: For the ABC group at Ye-Dec-21 prepare a) Group Balance Sheet, A Ltd B Ltd C Ltd 24,000 13,000 34,000 29,000 16,000 71,000 29,000 16,000 40,000 15,000 10,000 25,000 10,000 4,000 6,000 4,000 2,000 71,000 29,000 16,000 b) Group Income Statement, and c) Explain subsidiary and associate accounting treatments in group accounting. For group and parent interests calculate d) Return on Equity, and e) Earnings per Share
Compute for the non-controlling interest in Net Income
Armadillo Enterprises acquired the following equity investmentsat the beginning of year 1 as trading investments. Description Number of shares Market price per share Total price Finestra Company 15,000 x $25 $387,500 BVD Company 20,000 X$18 $360,000 Market values at theend of Years 1 &2 are presented below: Market/Fair Value End of year 1 End of year 2 Finestra Company $19 $23 BVD Company |$22 $28 REQUIREMENTS: Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises sells 15,000 shares of BVD Company for $16at the beginning of year 2. Prepare the journal entry to record thesale. Prepare the adjusting journal entry required at the end of year2. Assume that ArmadilloEnterprises now holds these investments asavailable-for-sale. Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises…