a) Explain how each dividend would be treated in both the Consolidated statementof profit or loss and the Consolidated statement of changes in equity for the yearended 30 June 2022.b) Prepare the retained earnings and non-controlling income columns from theConsolidated statement of changes in equity for the year ended 30 June 2022c) What determines the status of an investment as an associate? Identify anyfurther information needed to confirm the status of Able as an associate? Bright Ltd has a 60% subsidiary Sharp Ltd and a 30% associate Able Ltd and isproducing its consolidated financial statements for the year ended 30 June 2022,extracts of which are shown below:Extract from the consolidated statement of profit or loss for the year ending 30June 2022Profit for the yearAttributable to:● Shareholders of the GroupNon-controlling interest380,000220,000600,000Extract from the consolidated statement of financial position at 30 June 2022Share capitalRetained earnings●£600,000Non-controlling interestTotal equity100,0001,500,000520,0002,120,000Each company paid a dividend during the year:• £250,000 was paid by Bright•£150,000 was paid by Sharp• £100,000 was paid by AbleYou can assume the dividends have been correctly recorded in the financialstatements of the individual entities.

According to the given question, we are required to prepare the statements as required.…

Answered: Bright Ltd has a 60% subsidiary Sharp…

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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Question

a) Explain how each dividend would be treated in both the Consolidated statement
of profit or loss and the Consolidated statement of changes in equity for the year
ended 30 June 2022.

b) Prepare the retained earnings and non-controlling income columns from the
Consolidated statement of changes in equity for the year ended 30 June 2022

c) What determines the status of an investment as an associate? Identify any
further information needed to confirm the status of Able as an associate?

Bright Ltd has a 60% subsidiary Sharp Ltd and a 30% associate Able Ltd and is
producing its consolidated financial statements for the year ended 30 June 2022,
extracts of which are shown below:
Extract from the consolidated statement of profit or loss for the year ending 30
June 2022
Profit for the year
Attributable to:
● Shareholders of the Group
Non-controlling interest
380,000
220,000
600,000
Extract from the consolidated statement of financial position at 30 June 2022
Share capital
Retained earnings
●
£
600,000
Non-controlling interest
Total equity
100,000
1,500,000
520,000
2,120,000
Each company paid a dividend during the year:
• £250,000 was paid by Bright
•
£150,000 was paid by Sharp
• £100,000 was paid by Able
You can assume the dividends have been correctly recorded in the financial
statements of the individual entities.

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