Illustrations of retained profits brought forward, Financial Accounting

Illustrations of retained profits brought forward

H Ltd acquired 75% of the ordinary shares of S Ltd since S Ltd was incorporated. The Summarized income statement for the two companies for the year ending 31 December

20X2 is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

H Ltd

S Ltd

 

 

 

 

£

£

Sales revenue

 

 

     75,000.00

            38,000.00

Cost of sales

 

 

 

    (30,000.00)

          (20,000.00)

Gross profit

 

 

 

     45,000.00

            18,000.00

Operating expenses

 

 

    (14,000.00)

            (8,000.00)

Profit before  tax

 

 

      31,000.00

            10,000.00

Taxation

 

 

 

    (10,000.00)

            (2,000.00)

Profit after tax

 

 

      21,000.00

              8,000.00

Retained profit b/f

 

 

     87,000.00

            17,000.00

Retained profit c/f

 

 

    108,000.00

            25,000.00

 

 

 

 

 

 

Required:

 

 

 

 

 

Prepare the consolidated income statement for the year ended 31 December 20X2.

 

H Ltd. And Its Subsidiary

Consolidated Income Statement for year ended 31/12/2002

 

£ ‘000’

£ ‘000’

Revenue(75+38)

 

113

Cost of sales(30+20)

 

(50)

Gross profit

 

63

Operating expenses(14+8)

 

22

Profit before tax

 

41

Income tax expense(10+2)

 

(12)

Profit after tax

 

29

Profit attributable to minority interest

 

(2)

Profit attributable to holding company

 

27

Retained profits b/f

 

  99.75

Retained profit b/f

 

126.75

Posted Date: 12/12/2012 4:59:00 AM | Location : United States







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