On 1 April, 2019 IKe purchased 80% of equity shares in Rosemary. On the same date IKe
Fantastic news! We've Found the answer you've been seeking!
Question:
On 1 April, 2019 IKe purchased 80% of equity shares in Rosemary. On the same date IKe acquired 40% of the 40 million equity shares in Abena paying Ghs2 per share.
The statement of profit or loss for the year ended 30 September 2019 are:
Transcribed Image Text:
Revenue Cost of sales (iii) (iv) Gross profit Distribution costs Administrative expenses Investment income (interest and dividends) 8,500 (1,650) Finance costs Profit (loss) before tax Income tax (expense) relief Profit (loss) for the year The following information is relevant: (i) Ike $000 190,000 (116,000) 74,000 (10,200) (16,300) 54,350 (15,000) 39,350 Rosemary $000 130,000 (90,000) 40,000 (5,000) (7,000) (2,000) 26,000 (10,000) 16,000 Abena $000 45,000 (35,000) 10,000 (4,000) (10,000) Nil (4,000) 1,000 (3,000) The fair values of the net assets of Rosemary at the date of acquisition were equal to their carrying amounts with the exception of an item of plant which had a carrying amount of Ghs11 million and a fair value of Ghs 15 million. This plant had a remaining life of five years (straight-line depreciation) at the date of acquisition of Rosemary. All depreciation ischarged to cost of sales. The fair value of the plant has not been reflected in Rosemary's financial statements. No fair value adjustments were required on the acquisition of the investment in Abena. Immediately after its acquisition of Rosemary, Ike invested Ghs45 million in an 7% loan note from Rosemary. All interest accruing to 30 September 2019 has been accounted for by both entities. Rosemary also has other loans in issue at 30 September 2019. Rosemary paid a dividend of Ghs7 million during the year. After the acquisition, Ike sold goods to Rosemary forGhs 13 million on which Ike made a gross profit of 18%. Rosemary had one third of these goods still in its inventory at 30 September 2019. Ike also sold goods to Abena for Ghs4 million, Revenue Cost of sales (iii) (iv) Gross profit Distribution costs Administrative expenses Investment income (interest and dividends) 8,500 (1,650) Finance costs Profit (loss) before tax Income tax (expense) relief Profit (loss) for the year The following information is relevant: (i) Ike $000 190,000 (116,000) 74,000 (10,200) (16,300) 54,350 (15,000) 39,350 Rosemary $000 130,000 (90,000) 40,000 (5,000) (7,000) (2,000) 26,000 (10,000) 16,000 Abena $000 45,000 (35,000) 10,000 (4,000) (10,000) Nil (4,000) 1,000 (3,000) The fair values of the net assets of Rosemary at the date of acquisition were equal to their carrying amounts with the exception of an item of plant which had a carrying amount of Ghs11 million and a fair value of Ghs 15 million. This plant had a remaining life of five years (straight-line depreciation) at the date of acquisition of Rosemary. All depreciation ischarged to cost of sales. The fair value of the plant has not been reflected in Rosemary's financial statements. No fair value adjustments were required on the acquisition of the investment in Abena. Immediately after its acquisition of Rosemary, Ike invested Ghs45 million in an 7% loan note from Rosemary. All interest accruing to 30 September 2019 has been accounted for by both entities. Rosemary also has other loans in issue at 30 September 2019. Rosemary paid a dividend of Ghs7 million during the year. After the acquisition, Ike sold goods to Rosemary forGhs 13 million on which Ike made a gross profit of 18%. Rosemary had one third of these goods still in its inventory at 30 September 2019. Ike also sold goods to Abena for Ghs4 million,
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
The financial statements for the year ended 30 November 20X3 of Springboard Ltd included a provision for doubtful debts at that date of 900. During the year ended 30 November 20X4, the company...
-
The fixed budget performance report for the year ended 30 June 2018 for Motueka Mint is as follows: Budget Actual Variance Units of production: 84 000 94 000 10 000 F Factory overhead: Variable...
-
Prepare a Statement of Profit or Loss for the company for the year ended 31st December 2018. 9. The following is the trial balance of Pebbles Limited at 31st December 2019. Dr Cr 000 000 Accounts...
-
In Problems 1316, find each sum. 10 (-2)* k=1
-
Discuss residual analysis in terms of the assumptions required for using the multiple regression model.
-
Were the payments to Alan protected by the business judgment rule? Years ago, Harry Lippman purchased Despatch Industries, Inc., which manufactured hardware for cabinets. His son, James, worked for...
-
Figure \(\mathrm{P} 28. 43\) shows two paths (A and B) around a wire that carries current \(I\). (a) Along which path is the line integral of the magnetic field greater? (b) Along which path is the...
-
Classification IssuesIntangible Asset Langrova Inc. has the following amounts included in its general ledger at December 31, 2010. (a) On the basis of the information above, compute the total amount...
-
Part A A string that is 9.6 m long is tied between two posts and plucked. The string produces a wave that has a frequency of 320 Hz and travels with a speed of 192 m/s. How many full wavelengths of...
-
Harper Morgan owns White Mountain Assessments in Laconia, New Hampshire. The standard workweek is 40 hours. For the weekly payroll ending September 9, 2022, checks dated September 14, 2022, complete...
-
A common pitfall of using a cost-leadership strategy is that ______. Multiple choice question. firms more easily get stuck in the middle value-creating activities are easily imitated the barriers to...
-
The area of a square is represented by the formula A-s. When that square is cut by a diagonal, two isosceles triangles are formed. The area of one of the resulting triangles is A = Suppose you know...
-
1 1+P 1+p+q If C = 2 3+2p 3 6+3p 10+6p+3q] 4+3p+2q ; Calculate det (2C-1)
-
please use the facts and circumstances outlined above and address the following items. Estimate the fixed and variable portions using the high-low method. Test the assertion. Using the updated data...
-
As the Jones' Financial Planner, are they on the right track to reach their retirement goal?Using TVM Calculations, determine at the current savings rate how close to the goal of 1.4 million at...
-
Take a look at the C code (fa-pipe.c) shown below. Assume that all system and library calls succeed at runtime. (All error handling code has been omitted for brevity.) #include #include #include...
-
What are some key points in the Worldcom case (link below) and some of the lessons mentioned by the Ernst Young accountants who commented. https://www.youtube.com/watch?v=hXSWAK0K5L4
-
The Alert Company is a closely held investment-services group that has been very successful over the past five years, consistently providing most members of the top management group with 50% bonuses....
-
Which of the following statements best describes corporate governance with respect to fraud? 1. Auditors are primarily responsible for the detection of fraud, the Board of Directors for the...
-
Which of the following is not a reason that the prevention and detection of fraud resulting from management override and collusion presents a significant challenge for the antifraud community? 1....
-
Which of the following is not an inherent part of Statement on Auditing Standards, No. 99/113? 1. Greater scrutiny of the chief executive and chief financial officers personal financial condition 2....
Study smarter with the SolutionInn App