Illustration: computation of retained profits acquisition, Financial Accounting

Illustration: Computation of retained profits acquisition

Assume that H Ltd.. Acquired 80% of S Ltd.. On 1st April, 2003. The retained profits of the subsidiary company b/d amounted to £ 120,000 and the c/d amounted to £150,000.

REQ. Compute the retained profits on date of acquisition and the amount to be transferred to the cost of control if the financial year end is 31/12/03

Retained profits for the year:   Bal c/d – Bal b/d
                                          =150,000 – 120,000
                                          =30,000

Pre-acquisition profits: 1st Jan 03 – 31st March 03   = ¼ X30,000 = 7500

Retained profits on acquisition   =  bal b/d  + pre-acquisition
                                                   =  120,000 + 7500
                                                   =   £127,000

  To cost of control
                 = 80% x 127,000
                 = £102,000

Posted Date: 12/12/2012 4:15:15 AM | Location : United States







Related Discussions:- Illustration: computation of retained profits acquisition, Assignment Help, Ask Question on Illustration: computation of retained profits acquisition, Get Answer, Expert's Help, Illustration: computation of retained profits acquisition Discussions

Write discussion on Illustration: computation of retained profits acquisition
Your posts are moderated
Related Questions
The partnership of Lewis and Clark had these balances at April 30, 2008: Cash........$28,000 Liabilities........56,000 Clark Capital...14,000 Other Assets...84,000 Service Re

what is recorded sales on account of 3,280

#Which of the two ratios are the greatest? 1.67.1 or 0.29.1



Various types of accounting changes can affect the financial statements of a business enterprise differently. Assume that the following list describes changes that have a material

In June 2004, Feltex Carpets Limited raised NZ $254 million in an initial public offering. Twenty seven months later the company was in receivership, its share price having collaps

Q. Show the Capitalized Cost? Capitalized Cost - Expenditure identified with services or goods acquired and measured by theamount of cash paid or market value of other property

Lockheed Martin's management wishes to find out whether they have excess debt capacity. Its current market value of equity is $40 b and its book value of debt is $