Question SevenA Ltd acquired 75% of the shares of B Ltd in 2005. The summarised income statement andmovements on retained earnings of the two companies for the year ended 31st December, 2009 areas given belowSales revenueCost of salesGross profitExpensesProfit before taxincome tax expenseprofit after taxRetained profit brought fwdRetained profit carried fwdP LtdS Ltd93,750,000 47,500,00037,500,000 25,000,00056,250,000 22,500,00017,500,000 10,000,00038,750,000 12,500,00012,500,000 2,500,00026,250,000 10,000,000108,750,000 10,000,000135,000,000 20,000,000You are further told that B Ltd sold goods to A Ltd for Shs 6,250,000. B Ltd had purchased thesegoods for Shs 3,750,000 and 40% of the goods remained in A's Ltd inventory as at 31st December,2009You are required to prepare consolidated come statement of A group

The financial statements of a business having several divisions or subsidiaries are called…

Question Seven A Ltd acquired 75% of the shares of B Ltd in 2005. The summarised income statement and movements on retained earnings of the two companies for the year ended 31st December, 2009 are as given below Sales revenue Cost of sales Gross profit Expenses Profit before tax income tax expense profit after tax Retained profit brought fwd Retained profit carried fwd P Ltd 93,750,000 S Ltd 47,500,000 37,500,000 25,000,000 56,250,000 22,500,000 17,500,000 10,000,000 38,750,000 12,500,000 12,500,000 2,500,000 26,250,000 10,000,000 108,750,000 10,000,000 135,000,000 20,000,000 You are further told that B Ltd sold goods to A Ltd for Shs 6,250,000. B Ltd had purchased these goods for Shs 3,750,000 and 40% of the goods remained in A's Ltd inventory as at 31st December, 2009 You are required to prepare consolidated come statement of A group

Question Seven A Ltd acquired 75% of the shares of B Ltd in 2005. The summarised income statement and movements on retained earnings of the two companies for the year ended 31st December, 2009 are as given below Sales revenue Cost of sales Gross profit Expenses Profit before tax income tax expense profit after tax Retained profit brought fwd Retained profit carried fwd P Ltd 93,750,000 S Ltd 47,500,000 37,500,000 25,000,000 56,250,000 22,500,000 17,500,000 10,000,000 38,750,000 12,500,000 12,500,000 2,500,000 26,250,000 10,000,000 108,750,000 10,000,000 135,000,000 20,000,000 You are further told that B Ltd sold goods to A Ltd for Shs 6,250,000. B Ltd had purchased these goods for Shs 3,750,000 and 40% of the goods remained in A's Ltd inventory as at 31st December, 2009 You are required to prepare consolidated come statement of A group

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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Computing consolidated earnings per share (EPS) Assume the following facts about a parent and its 75% owned subsidiary company: Parent Net income Common shares outstanding Convertible preferred stock Convertible bonds $180,000 50,000 Dividends = $17,100 Convertible into 9,000 shares of common stock a. Compute basic earnings per share $ b. Compute diluted earnings per share LA Subsidiary $45,000 22,000 (16,500 = 75% owned by parent) Interest expense after tax = $7,200 Convertible into 4,500 shares of common stock
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Computing consolidated earnings per share (EPS) Assume the following facts about a parent and its 75% owned subsidiary company: Net income $210,000 Common shares outstanding 50,000 Convertible preferred stock Dividends $20,100 Convertible into 9,000 shares of common stock Convertible bonds a. Compute basic earnings per share $ Parent b. Compute diluted earnings per share Subsidiary $49,000 28,000 (21,000 = 75% owned by parent) Interest expense after tax = $7,100Convertible Into 6,000 shares of common stock
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