A Ltd acquired 75% of the shares of B Ltd in 2005. The summarised income statement...

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A Ltd acquired 75% of the shares of B Ltd in 2005. The summarised income statement and movements on retained earnings of the two companies for the year ended 31st December, 2009 are as given below Sales revenue Cost of sales Gross profit Expenses Profit before tax income tax expense profit after tax Retained profit brought fwd Retained profit carried fwd P Ltd 93,750,000 S Ltd 47,500,000 37,500,000 25,000,000 56,250,000 22,500,000 17,500,000 10,000,000 38,750,000 12,500,000 12,500,000 2,500,000 26,250,000 10,000,000 108,750,000 10,000,000 135,000,000 20,000,000 You are further told that B Ltd sold goods to A Ltd for Shs 6,250,000. B Ltd had purchased these goods for Shs 3,750,000 and 40% of the goods remained in A's Ltd inventory as at 31st December, 2009 You are required to prepare consolidated come statement of A group A Ltd acquired 75% of the shares of B Ltd in 2005. The summarised income statement and movements on retained earnings of the two companies for the year ended 31st December, 2009 are as given below Sales revenue Cost of sales Gross profit Expenses Profit before tax income tax expense profit after tax Retained profit brought fwd Retained profit carried fwd P Ltd 93,750,000 S Ltd 47,500,000 37,500,000 25,000,000 56,250,000 22,500,000 17,500,000 10,000,000 38,750,000 12,500,000 12,500,000 2,500,000 26,250,000 10,000,000 108,750,000 10,000,000 135,000,000 20,000,000 You are further told that B Ltd sold goods to A Ltd for Shs 6,250,000. B Ltd had purchased these goods for Shs 3,750,000 and 40% of the goods remained in A's Ltd inventory as at 31st December, 2009 You are required to prepare consolidated come statement of A group

Answer rating: 100% (QA)

A Ltd acquired 75 shares of B Ltd in 2005 So it is a subsidiary Sales revenue of A Ltd Rs 93750... View the full answer