The parent acquired 75% of the ordinary shares of Sub with acquired control. The summarized statement of profit or loss of the two companies for the year ending February 29, 2020, is given below. Sub sold goods to Parent for $8000. It had bought these goods for $6000. 40% of these goods rem ainine3d in Parent's inventory on February 29, 2020. Prepared consolidated statement of profit and loss in a suitable form at Parent Sub Sales 87,000 (54,000) 33,000 (13,500) 19,500 45,000 Cost of Sales Gross Profit Operating Expenses Profit before tax Income tax expense Profit for the year (19,000) 26,000 (9,800) 16,200 4,536 5,460 14,040 11,664
The parent acquired 75% of the ordinary shares of Sub with acquired control. The summarized statement of profit or loss of the two companies for the year ending February 29, 2020, is given below. Sub sold goods to Parent for $8000. It had bought these goods for $6000. 40% of these goods rem ainine3d in Parent's inventory on February 29, 2020. Prepared consolidated statement of profit and loss in a suitable form at Parent Sub Sales 87,000 (54,000) 33,000 (13,500) 19,500 45,000 Cost of Sales Gross Profit Operating Expenses Profit before tax Income tax expense Profit for the year (19,000) 26,000 (9,800) 16,200 4,536 5,460 14,040 11,664
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The parent acquired 75% of the ordinary shares of Sub with acquired control. The
summarized statem ent of profit or loss of the two companies for the year ending February
29, 2020, is given below. Sub sold goods to Parent for $8000. It had bought these goods for
$6000. 40% of these goods rem ainine3d in Parent's inventory on February 29, 2020.
Prepared consolidated statement of profit and loss in a suitable format
Parent
Sub
Sales
87,000
45,000
(19,000)
26,000
(9,800)
16,200
4,536
Cost of Sales
(54,000)
33,000
(13,500)
19,500
5,460
Gross Profit
Operating Expenses
Profit before tax
Income tax expense
Profit for the year
14,040
11,664
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