Alpha plc acquired 800,000 ordinary shares of 50p each in Beta plc for 760,000 on 1 April
Question:
Alpha plc acquired 800,000 ordinary shares of 50p each in Beta plc for £760,000 on 1 April 2010 when:
(i) Beta had an accumulated profit of £90,000.
(ii) The market value of Beta’s land was £460,000.
(iii) Beta’s shares were quoted at 92 pence each.
The Statements of financial position of both companies appear as shown. You are informed as follows:
(a) Receivables reported by Alpha include £42,000 due from Beta. The corresponding amount reported by Beta is £18,000. Goods invoiced by Alpha at £16,000 are in transit. The remainder of the difference arose from cash in transit.
(b) £32,000 of goods reported by Beta have been invoiced to it by Alpha.
(c) Alpha invoices Beta at cost plus a third.
Required:
The Consolidated Statement of financial position of the Alpha group as at 31 March 2012.
The par value of each share is 50p.
Step by Step Answer:
Financial Accounting An Introduction
ISBN: 9780273737650
2nd Edition
Authors: Mr Barry Elliott, Mr Augustine Benedict