The following are the financial statements relating to Black, a limited liability company, and its subsidiary...

   

Transcribed Image Text:

The following are the financial statements relating to Black, a limited liability company, and its subsidiary company Bury. STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 OCTOBER 20X5 Black Bury $'000 $'000 245,000 95,000 Sales revenue Cost of sales (140,000) (52,000) Gross profit 105,000 43,000 Distribution costs (12,000) (10,000) Administrative expenses (55,000) (13,000) Dividend income from Bury Profit before tax 45,000 20,000 Tax (13,250) (5,000) Profit for the year 31,750 15.000 STATEMENTS OF FINANCIAL POSITION AS AT 31 OCTOBER 20X5 Black Bury $'000 $'000 $'000 Assets: Non-current assets: Property, plant and equipment 110,000 40,000 Investments: 21,000,000 $1 131,000 ordinary shares in Bury at cost 21.000 Current assets Inventory, at cost Trade receivables and dividend receivable Bank Total current assets 12,740 Total assets 52,740 13,360 14,640 3,500 31,500 162,500 7,000 $'000 3,890 6,280 2,570 40,000 Equity and liabilities: Equity: $1 Ordinary shares Retained earnings. Current liabilities: Payables Dividend Total liabilities Total equity and liabilities 9,000 20,000 100,000 33,500 133,500 29,000 162,500 30,000 10,280 40,280 12.460 52,740 2,460 10,000 Additional information (a) Black purchased its $1 ordinary shares in Bury on 1 November 20X0. At that date the balance on Bury's retained earnings was $2 million. The fair value of the non-controlling interest at the date of acquisition was $11,800,000. (b) During the year ended 31 October 20X5 Black sold goods which originally cost $12 million to Bury. Black invoiced Bury at cost plus 40%. Bury still has 30% of these goods in inventory at 31 October 20X5. (c) Bury owed Black $1.5 million at 31 October 20X5 for some of the goods Black supplied during the year Required Prepare the following financial statements for Black Group. a) The consolidated statement of profit or loss for the year ended 31 October 20X5 b) The consolidated statement of financial position as at 31 October 20X5 The following are the financial statements relating to Black, a limited liability company, and its subsidiary company Bury. STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 OCTOBER 20X5 Black Bury $'000 $'000 245,000 95,000 Sales revenue Cost of sales (140,000) (52,000) Gross profit 105,000 43,000 Distribution costs (12,000) (10,000) Administrative expenses (55,000) (13,000) Dividend income from Bury Profit before tax 45,000 20,000 Tax (13,250) (5,000) Profit for the year 31,750 15.000 STATEMENTS OF FINANCIAL POSITION AS AT 31 OCTOBER 20X5 Black Bury $'000 $'000 $'000 Assets: Non-current assets: Property, plant and equipment 110,000 40,000 Investments: 21,000,000 $1 131,000 ordinary shares in Bury at cost 21.000 Current assets Inventory, at cost Trade receivables and dividend receivable Bank Total current assets 12,740 Total assets 52,740 13,360 14,640 3,500 31,500 162,500 7,000 $'000 3,890 6,280 2,570 40,000 Equity and liabilities: Equity: $1 Ordinary shares Retained earnings. Current liabilities: Payables Dividend Total liabilities Total equity and liabilities 9,000 20,000 100,000 33,500 133,500 29,000 162,500 30,000 10,280 40,280 12.460 52,740 2,460 10,000 Additional information (a) Black purchased its $1 ordinary shares in Bury on 1 November 20X0. At that date the balance on Bury's retained earnings was $2 million. The fair value of the non-controlling interest at the date of acquisition was $11,800,000. (b) During the year ended 31 October 20X5 Black sold goods which originally cost $12 million to Bury. Black invoiced Bury at cost plus 40%. Bury still has 30% of these goods in inventory at 31 October 20X5. (c) Bury owed Black $1.5 million at 31 October 20X5 for some of the goods Black supplied during the year Required Prepare the following financial statements for Black Group. a) The consolidated statement of profit or loss for the year ended 31 October 20X5 b) The consolidated statement of financial position as at 31 October 20X5

Answer rating: 100% (QA)

a Calculation of goodwill Fair value of consideration trans... View the full answer