FF Ltd acquired 80% of the ordinary share capital of GG Ltd on 1 April 2020. On
Question:
FF Ltd acquired 80% of the ordinary share capital of GG Ltd on 1 April 2020. On that date, the retained earnings of GG Ltd were £18,260. There are no preference shares. The statements of comprehensive income of FF Ltd and GG Ltd for the year to 31 March 2024 are as follows:
The statement of changes in equity for FF Ltd and GG Ltd show the following retained earnings figures for the year to 31 March 2024:
On 4 February 2024, FF Ltd sold goods to GG Ltd for £10,000. These goods had cost FF Ltd £6,000. One-quarter of them were included in GG Ltd's inventory at 31 March 2024.
Required:(a) Prepare a consolidated statement of comprehensive income for the year to 31 March 2024, assuming that there are no impairment losses in relation to goodwill.(b) Prepare an extract from the consolidated statement of changes in equity for the year to 31 March 2024, showing the changes in the group's retained earnings.
Step by Step Answer:
International Financial Reporting a practical guide
ISBN: 9781292439426
8th Edition
Authors: Alan Melville