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Accounting
А. E273,000

А. E273,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Andrew acquired 80% of the equity shares of Alpha on 1 January 2015 when Alpha's retained earnings were £100,000. During the year ended 31 December 2015, Alpha purchased goods from Andrew totaling £160,000. At 31 December 2015, 25% of these goods were still in the inventory of Alpha. Andrew applies a mark-up on cost of 25% to all of its sales. At 31 December 2015, the retained earnings of Andrew and Alpha were £225,000 and £170,000 respectively. What would be the amount of retained earnings in Andrew's consolidated statement of financial position as at 31 December 2015? А. £273,000 В. £271,000. С. £249,000. D. None of the above
Transcribed Image Text:Andrew acquired 80% of the equity shares of Alpha on 1 January 2015 when Alpha's retained earnings were £100,000. During the year ended 31 December 2015, Alpha purchased goods from Andrew totaling £160,000. At 31 December 2015, 25% of these goods were still in the inventory of Alpha. Andrew applies a mark-up on cost of 25% to all of its sales. At 31 December 2015, the retained earnings of Andrew and Alpha were £225,000 and £170,000 respectively. What would be the amount of retained earnings in Andrew's consolidated statement of financial position as at 31 December 2015? А. £273,000 В. £271,000. С. £249,000. D. None of the above
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