Lec-44 - Advanced Financial Accounting Lec-44 Main Ahmad...

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Advanced Financial Accounting Lec-44 Main Ahmad Farhan
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Solution
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Income Statement For the year ended 2000 Rs. Rs. Sales 7,500 4,000 Less Cost of goods sold 4,500 2,900 Gross profit 3,000 1,100 Less Operating expenses 1,800 600 Operating profit 1,200 500 Add Dividend income 100 --- Net profit before tax 1,300 500 Less Income tax 520 200 Net profit after tax 780 300 Less Ordinary dividend paid 250 125 Net profit after dividend payment 530 175 Add Opening retained profit 1,000 450
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Question The Parent Co. acquired 80% equity of Subsidiary Co. on 1 st Jan 2003 for Rs. 1,700 when S paid share capital was Rs. 1,250 and it’s reserves were worth Rs. 50. During the year S sold to P goods costing Rs. 1,000 and selling price Rs. 1,250. Total goodwill has been impaired so-far. Required : Prepare the consolidated Income Statement for the year ended for 31-12-2008.
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Working Holding % = 80% Minority % = 20%
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Working (Goodwill) Cost of investment 1,700 Ordinary share capital of S (1,250+50 x 80%) 1,040 Goodwill 660 Less Impairment of owner’s equity 660 0
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This note was uploaded on 05/15/2010 for the course ACCOUNTING B97702031 taught by Professor Lyz during the Spring '09 term at Punjab Engineering College.

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Lec-44 - Advanced Financial Accounting Lec-44 Main Ahmad...

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