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