Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Company Big owns 80% of Company Small. Their separate statements of profit or loss for the financial year ended on 31 December 2021 are as

Company Big owns 80% of Company Small. Their separate statements of profit or loss for the financial year ended on 31 December 2021 are as follows:

Big () Small ()
Sales revenue 800,000 500,000
Cost of sales 560,000 300,000
Gross profit 240,000 200,000

During the year 2021 Co Big sold goods to Co small for 150,000. These goods had cost Co Big 120,000.

What amounts are reported on the consolidated statement of profit or loss for the year ended 31 December 2021 for the group if all the goods were still in the inventory of Small Co at the year-end:

Sales revenue ["1,180,000", "1,040,000", "1,300,000", "1,150,000"]
Cost of sales ["740,000", "710,000", "860,000", "688,000"]
Gross profit ["470,000", "440,000", "352,000", "410,000"]

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions