H plc owns 80% of the the voting shares of S plc. S plc is a subsidiary of H plc. The most recent income statements of each company include the following entries: H S £ £ Interest receivable 111,000 76,000 Finance charges 220,000 342,000 Two years' previously H plc made a loan of 437,000 to S plc which is repayable in full in 3 years' time. The loan bears interest at 8% a year. What figure will be reported in the Consolidated Income Statement of H plc for 'Interest receivable'?

H plc owns 80% of the the voting shares of S plc. S plc is a subsidiary of H plc. The most recent income statements of each company include the following entries: H S £ £ Interest receivable 111,000 76,000 Finance charges 220,000 342,000 Two years' previously H plc made a loan of 437,000 to S plc which is repayable in full in 3 years' time. The loan bears interest at 8% a year. What figure will be reported in the Consolidated Income Statement of H plc for 'Interest receivable'?

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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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

H plc owns 80% of the the voting shares of S plc. S plc is a subsidiary of H plc.
The most recent income statements of each company include the following entries:
H
S
£
£
Interest receivable
111,000
76,000
Finance charges
220,000
342,000
Two years' previously H plc made a loan of 437,000 to S plc which is repayable in full in 3
years' time. The loan bears interest at 8% a year.
What figure will be reported in the Consolidated Income Statement of H plc for 'Interest
receivable'?

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