Hello, I saw your answer and explanation for the following question:On 31 December 2018 Pee Plc purchased 80% of the share capital of Cee Ltd for £60,000 when its accumulated profits were £30,000. The individual Statement of Financial Positions of Pee Plc and Cee Ltd at 31 December 2020 were as follows: But I cannot understand part 2 and especially 3 from where it comes£15,000 + £2,000 = £17,000. Please see the attached photo. Could you be able to help me out?Thank you A bartleby.comE University | PDF2DOCX| TESTAmazon JobsLocal Food Map - Big Barn UWS MoodleShopifyEtsyUPSOnBuySheetsTidio ParcelforceRephrase itVan Driver JobsHome - Job helpAmazon Flex job>>GGb Answer.GG= bartlebyQ Search for textbooks, step-by-step explanations to homework question...E Ask an Expert+ Q&A LibraryQuestion1 a) On 31 December 2018 Pee Plc purc...Step 1When a parent company acquired more than50% of stocks in another company, it must prepare aconsolidated statement at the end of the year. Under the consolidated statement, a non-controlling interest isalso shown if the stock acquired is less than 100%.Under the consolidated statements, the intercompany transactions are eliminated. Intercompany transactionsare those transactions that occur between the parent company and subsidiary company.Step 2The consolidated statement will include the goodwill generated while acquiring the stocks in subsidiarycompany and non-controlling interest.ConsolidatedNon-current assets:Property, Plant and equipment16000050000210000Cost of investment60000Goodwill2500022000050000235000Current assets300001000040000Total assets25000060000275000Equity and liabilities:Ordinary shares10000020000100000Retained profit15000040000158000Non-controlling asset17000Total25000060000275000 A bartleby.comE University | PDF2DOCX|TESTAmazon JobsLocal Food Map - Big Barn UWS MoodleShopifyEtsyUPSOnBuySheetsTidio ParcelforceRephrase itVan Driver JobsHome - Job helpAmazon Flex job>>GGb Answer.G= bartlebyQ Search for textbooks, step-by-step explanations to homework question...E Ask an Expert+ Q&A LibraryQuestion1 a) On 31 December 2018 Pee Plc purc...Note:1. The goodwill at the time of acquisition can be determined as follows:Ordinary sharesRetained profit20,00030,000Total net asset50,000Further, the P company acquires 80% of stocks for £60,000.60,000Hence, the complete value of the firm == £75, 0000.80Therefore,Goodwill = 75, 000 - 50, 000 = £25, 0002. Retained earnings for the consolidated statement can be determined as follows:Retained earnings of parent company = £150, 000Share of parent company in subsidiary profit after acquisition= (40, 000 - 30, 000) x 80% = £8,000Therefore,Total retained earnings for consolidated statements = 150, 000 + 8, 000 =£158, 0003. Non-controlling interest for consolidated statementNon – controlling interest = Non – controlling interest at acquisition + Minority share in prof it afteracquisition= 15, 000 + 2, 000= £17, 000

Non-controlling interest is described as that percentage of the subsidiary company which is not…

Answered: Hello, I saw your answer and…

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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Hello, I saw your answer and explanation for the following question:

On 31 December 2018 Pee Plc purchased 80% of the share capital of Cee Ltd for £60,000 when its accumulated profits were £30,000. The individual Statement of Financial Positions of Pee Plc and Cee Ltd at 31 December 2020 were as follows:

But I cannot understand part 2 and especially 3 from where it comes

£15,000 + £2,000 = £17,000. Please see the attached photo.

Could you be able to help me out?

Thank you

A bartleby.com
E University | PDF2DOCX| TEST
Amazon Jobs
Local Food Map - Big Barn UWS Moodle
Shopify
Etsy
UPS
OnBuy
Sheets
Tidio Parcelforce
Rephrase it
Van Driver Jobs
Home - Job help
Amazon Flex job
>>
G
G
b Answer.
G
G
= bartleby
Q Search for textbooks, step-by-step explanations to homework question...
E Ask an Expert
+ Q&A Library
Question1 a) On 31 December 2018 Pee Plc purc...
Step 1
When a parent company acquired more than50% of stocks in another company, it must prepare a
consolidated statement at the end of the year. Under the consolidated statement, a non-controlling interest is
also shown if the stock acquired is less than 100%.
Under the consolidated statements, the intercompany transactions are eliminated. Intercompany transactions
are those transactions that occur between the parent company and subsidiary company.
Step 2
The consolidated statement will include the goodwill generated while acquiring the stocks in subsidiary
company and non-controlling interest.
Consolidated
Non-current assets:
Property, Plant and equipment
160000
50000
210000
Cost of investment
60000
Goodwill
25000
220000
50000
235000
Current assets
30000
10000
40000
Total assets
250000
60000
275000
Equity and liabilities:
Ordinary shares
100000
20000
100000
Retained profit
150000
40000
158000
Non-controlling asset
17000
Total
250000
60000
275000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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