Question
QUESTION ONE Kings Plc made the following investments: a. 15 million shares in Yaka Limited on 30 June 20X1 for K25 million, when the reserves
QUESTION ONE
Kings Plc made the following investments:
a. 15 million shares in Yaka Limited on 30 June 20X1 for K25 million, when the reserves of Y Limited were K10 million
b. 8 million shares in Zulu Limited on 30 June 20X3 for K12.million, when the reserves of Zulu Limited were K8 million
The summarized Income Statements for the year ended 30 June 20Y0 were as follows:
King Plc Yaka Ltd Zulu Ltd
Km Km Km
Sales revenue 200 111 51.6
Operating costs 100 55.5 25.8
Operating profit 100 55.5 25.8
Investment income 8
Profit before tax 108 55.5 25.8
Income tax 32 18.5 8.6
Profit for the period 76 37.0 17.2
Statements of changes in equity for the year ended 30 June 20Y0
Kings Plc Yaka Ltd Zulu Ltd
Km Km Km
Balance at 1 July 20X9 82.8 33 30.8 2
Profit for the year 76.0 37 17.2
Dividends paid (30.0) (10) (8.0)
Balance at 30 June 20Y0 128.8 60 40
Balance Sheets as at 30 June 20Y0
Kings Plc Yaka Ltd Zulu Ltd
Km Km Km
Non-current assets 118.0 60 40
Investments 48.6 - -
166.6 60 40
Issued share capital K1 60.0 20 20
Reserves 106.6 40 20
166.6 60 40
Additional information:
Included in the serves of Kings Ltd is K37.8 million relating to the proceeds of sale of all the shares held in Zulu Ltd. The shares were disposed of on the 31 March 20Y0.
A tax liability of K2.6 million in relation to the sale of shares has not yet been provided for by
Kings Plc
Required:
i) Prepare the kings Plc group entities Consolidated Income Statement and Statement of Financial Position as at 30 June 20Y0. (30 Marks)
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