Oat bought 20% of Flax on 1 January 20X1 for £500,000 when Flax had £1,000,000 share capital and £3,600,000 retained earnings. Oat has as a contractual agreement with two other investors in Flax suc that they jointly control Flax's operations. At the year-end 31 December 20X1, Flax had retained earnings of £4,000,000. During the year Flax sold goods to Oat, making a profit of £50,000. None of these items had been sold b Oat at the year end. What is the value to be shown under "Investments in Joint Ventures" in the consolidated statement of financial position at 31 December 20X1? O a. £570,000 O b. £770,000 O C. None of these options are correct O d. £530,000 e. £820,000 f. £580,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Oat bought 20% of Flax on 1 January 20X1 for £500,000 when Flax had £1,000,000 share capital and
£3,600,000 retained earnings. Oat has as a contractual agreement with two other investors in Flax such
that they jointly control Flax's operations.
At the year-end 31 December 20X1, Flax had retained earnings of £4,000,000.
During the year Flax sold goods to Oat, making a profit of £50,000. None of these items had been sold by
Oat at the year end.
What is the value to be shown under "Investments in Joint Ventures" in the consolidated
statement of financial position at 31 December 20X1?
a. £570,000
O b. £770,000
С.
None of these options are correct
O d. £530,000
O e. £820,000
O f. £580,000
Transcribed Image Text:Oat bought 20% of Flax on 1 January 20X1 for £500,000 when Flax had £1,000,000 share capital and £3,600,000 retained earnings. Oat has as a contractual agreement with two other investors in Flax such that they jointly control Flax's operations. At the year-end 31 December 20X1, Flax had retained earnings of £4,000,000. During the year Flax sold goods to Oat, making a profit of £50,000. None of these items had been sold by Oat at the year end. What is the value to be shown under "Investments in Joint Ventures" in the consolidated statement of financial position at 31 December 20X1? a. £570,000 O b. £770,000 С. None of these options are correct O d. £530,000 O e. £820,000 O f. £580,000
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