Set out below are the financial statements of Ant Co., its subsidiary Bug Co. and an associated
Question:
Set out below are the financial statements of Ant Co., its subsidiary Bug Co. and an associated company Nit Co. for the accounting year-end 31 December 20X9.
Statements of comprehensive income for the year ended 31 December 20X9
Ant Co. acquired 80% of the shares in Bug Co. on 1 January 20X7 when the balance on the retained earnings of Bug Co. was $45,000 and the balance on the general reserve of Bug Co. was $12,000. The fair value of the non-controlling interest in Bug on 1 January 20X7 was £21,000. Group policy is to measure non-controlling interests using method 2. Ant Co. also acquired 25% of the shares in Nit Co. on 1 January 20X8 when the balance on Nit’s retained earnings was $22,500 and the general reserve $6,000.
During the year Ant Co. sold Bug Co. goods for $12,000, which included a mark-up of one-third. 90% of these goods were still in inventor y at the end of the year.
Required:
(a) Prepare a consolidated statement of comprehensive income for the year ending 31/12/20X9, including the associated company Nit’s results.
(b) Prepare a consolidated statement of financial position at 31/12/20X9, including the associatedcompany.
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott