Question
Question 1 Green Ltd owns the following investments in other companies: Equity (voting) Shares Non equity shares Violet Ltd 80% Nil Amber Ltd 25% 80%
Question 1
Green Ltd owns the following investments in other companies:
| Equity (voting) Shares | Non equity shares |
Violet Ltd | 80% | Nil |
Amber Ltd | 25% | 80% |
Black Ltd | 45% | 25% |
Green Ltd also has appointed five of the seven directors of Black Ltd.
Which of the following investments are accounted for as subsidiaries in the consolidated accounts of Green Ltd Group?
A. Violet only
B. Amber only
C. Violet and Black
D. All of them
Question 2
Pink Ltd acquired 80% of Scarletts Ltd ordinary share capital on 1 January 20X2.
As at 31 December 20X2, extracts from their individual statements of financial position showed:
| Pink Ltd | Scarlett Ltd |
Current assets: Receivables | 50,000 | 30,000 |
Current liabilities: Payables | 70,000 | 42,000 |
As a result of trading during the year, Pink Ltds receivables balance included an amount due from Scarlett of 4,600.
What should be shown as the consolidated figure for receivables and payables?
| Pink Ltd | Scarlett Ltd |
A | 80,000 | 112,000 |
B | 75,400 | 112,000 |
C | 74,000 | 103,600 |
D | 75,400 | 107,400 |
Question 3
Purple Ltd acquired 70% of the voting share capital of Silver Ltd on 1 October 20X1.
The following extracts are from the individual statements of profit or loss of the two companies for the year ended 30 September 20X2:
| Purple Ltd | Silver Ltd |
Revenue | 79,000 | 29,900 |
Cost of sales | (54,990) | (17,940) |
Gross profit | 24,310 | 11,960 |
Purple Ltd had made sales to Silver Ltd during the year of 5,000. Purple Ltd had originally purchased the goods at a cost of 4,000. Half of these items remained in the inventory of Silver Ltd at the year end.
What should be the consolidated revenue for the year ended 30 September 20X2?
A 104,700
B 95,230
C 108,700
D 104,200
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