On 1 January 2017 Picaso Ltd acquired 51% of Sindbad Ltd by $150000 cash and gained...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On 1 January 2017 Picaso Ltd acquired 51% of Sindbad Ltd by $150000 cash and gained control. On the day of acquisition S had Share capital of $500,000 and Retained earnings of $15000 in as its equity. During the year P sold S Ltd goods for $18000 which includes a mark-up of 50%. Half of these goods were still in stock of S at the end of the year. Also, P sold a truck to P Ltd $5000 which had a book value of $4000. The financial statements of the two companies are as follows. Prepare the group's Income Statement and Balance Sheet. P Sales Less: Cost of Goods Sold Gross profit Operating Expenses: Selling Expenses General and Admin Exp Net Operating Profit Gain on sale of Truck Net Profit Balance sheet as on 31 Dec 2017 Asset Investment in S Accounts Receivables Inventory Land Machine Accumulated Depreciation Machine Total Asset Liability Bond Accounts Payable Equity Share Capital retained earnings Liability and equity $400,000 100,000 300,000 50000 60000 190,000 1000 $189000 P $150,000 52,000 40,000 800,000 450,000 (20,000) 1,322,000 17,000 105,000 800,000 400000 1,322,000 $200,000 90,000 110,000 S 30000 20,000 60,000 $60000 32000 80000 680,000 165000 (12,000) 945000 308000 37000 500000 100000 945000 On 1 January 2017 Picaso Ltd acquired 51% of Sindbad Ltd by $150000 cash and gained control. On the day of acquisition S had Share capital of $500,000 and Retained earnings of $15000 in as its equity. During the year P sold S Ltd goods for $18000 which includes a mark-up of 50%. Half of these goods were still in stock of S at the end of the year. Also, P sold a truck to P Ltd $5000 which had a book value of $4000. The financial statements of the two companies are as follows. Prepare the group's Income Statement and Balance Sheet. P Sales Less: Cost of Goods Sold Gross profit Operating Expenses: Selling Expenses General and Admin Exp Net Operating Profit Gain on sale of Truck Net Profit Balance sheet as on 31 Dec 2017 Asset Investment in S Accounts Receivables Inventory Land Machine Accumulated Depreciation Machine Total Asset Liability Bond Accounts Payable Equity Share Capital retained earnings Liability and equity $400,000 100,000 300,000 50000 60000 190,000 1000 $189000 P $150,000 52,000 40,000 800,000 450,000 (20,000) 1,322,000 17,000 105,000 800,000 400000 1,322,000 $200,000 90,000 110,000 S 30000 20,000 60,000 $60000 32000 80000 680,000 165000 (12,000) 945000 308000 37000 500000 100000 945000
Expert Answer:
Answer rating: 100% (QA)
To prepare the groups Income Statement and Balance Sheet we need to consolidate the financial statem... View the full answer
Related Book For
International Financial Reporting A Practical Guide
ISBN: 978-1292200743
6th edition
Authors: Alan Melville
Posted Date:
Students also viewed these accounting questions
-
The financial statements of JJ Ltd and KK Ltd for the year to 30 June 2018 are shown below: Statements of comprehensive income for the year to 30 June 2018. Statements of financial position as at 30...
-
The following is Folex Company's income statement and balance sheet (in millions): The following additional information is available: i) Operating expenses include $35 million of depreciation. ii)...
-
The following are the summarized financial statements of two companies, Peel and Caval, for the financial year ended 31 October 2011. Income Statements for the year ended 31 October 2011 Statements...
-
An application program is executed on a nine-computer cluster. A benchmark program took time T on this cluster. Further, it was found that 25% of T was time in which the application was running...
-
What action is required when it is discovered that a five-year insurance premium payment of $50,000 two years ago was debited to insurance expense? (Ignore taxes.)
-
Presented here is selected information for Nike, Inc. (in U.S. $ millions) and Adidas AG (in euro millions): ____________________________________________________________ Nike ___________ Adidas Net...
-
The entry to record the payment of $1,200 rent expense would be which of the following? DATE ACCOUNTS POST REF. DR. CR. a. Rent Expense 1,200 Accounts Payable 1,200 b. Cash 1,200 Rent Expense 1,200...
-
A firm implementing a diversification strategy has just acquired what it claims is a strategically related target firm but announces that it is not going to change this recently acquired firm in any...
-
Looking at it from a validity standpoint, why are some biodata questions stronger predictors of performance than others?
-
Opsco Corp. provides the following information about its post-retirement health-care benefit plan for the year 2023: Instructions a. Assuming Opsco follows IFRS, calculate the post-retirement benefit...
-
Consider a mechanical mass-spring-damper system that is critically damped. For this system with a damping factor of (= 1 the governing equation has a solution that takes the form: x= [Xo+...
-
Stanley Department Stores reported net income of $788,000 for the year ended December 31, 2024. Additional Information: Common shares outstanding at January 1, 2024 Incentive stock options (vested in...
-
5. Assume that John consume only x and y and his utility is U(x, y) (x - 1)a (y-2)-a. If he has m dollars and faces p and py, obtain his optimal consumption bundle.
-
Dahl and Westhoff have decided to form a partnership. They have agreed that Dahl is to invest $400,000 and that Westhoff is to invest $100,000. Dahl is to devote one-third time to the business, and...
-
A 2.0 kg mass is placed against a spring of force constant 800 N/m, which has been compressed 0.22 m, as shown. The spring is released, and the object moves along the horizontal, frictionless surface...
-
Crane Manufacturing thinks that the best activity base for its manufacturing overhead is machine hours. The estimate of annual overhead costs is $580000. The company used 1000 hours of processing for...
-
On June 5th 2009, a share of Lululemon stock on Toronto Stock Exchange (TSX) was quoted as Bid: $15.58 and Ask: $15.84. If a competitive price is $15.71: O the transaction cost to buy or sell is...
-
President Lee Coone has asked you to continue planning for an integrated corporate NDAS network. Ultimately, this network will link all the offices with the Tampa head office and become the...
-
International standard IAS1 lists seven "general features" relating to the presentation of financial statements. These are: (a) Fair presentation and compliance with international standards (b) Going...
-
On 1 December 2014, Gebouw plc entered into a finance lease requiring the company to make payments of 785,000 each on 1 December 2014, 2015, 2016, 2017 and 2018. The fair value of the leased asset on...
-
(a) Distinguish between research and development within the context of IAS38 Intangible Assets . (b) State, with reasons, how the following expenditure would be dealt with in the financial statements...
-
Derive Equation 3.9, \(x(t)=C e^{-\zeta \omega_{n} t} \cos \left(\omega_{d} t-\phi ight)\).
-
(a) The response of an oscillator with mass \(m=1\) kg is shown in Figure 3.51. What can you say about the properties of the oscillator and the response? Determine the equation of motion and the...
-
Solve Equation 3.6, \(\ddot{x}+2 \zeta \omega_{n} \dot{x}+\omega_{n}^{2} x=0\) for \(\zeta>1\).\
Study smarter with the SolutionInn App