Question One The following are the condensed financial statements of Makwebo Ltd and subsidiary Zungulila Lud, which is partly owned: Balance sheets as at 30 June, 2006. Makwebo Ltd Zunguliland K Assets Investment in S Ltd: 64,000 ordinary shares at cost price Debtors Inventories 70,000 130,000 10,000 210.000 106, 000 30,000 136.000 100,000 80,000 Equity and Liabilities Authorised and issued share capital: K1,000 per ordinary share Retained profit Creditors 26,000 $4,000 210,000 20,000 36,000 136,000 Income statement for the year ended 30 June, 2006 Mukwebo Ltd Revenue 100,000 Cost of sales (50.000) Gross profit 50,000 Other operating expenses Profit before tax 17,000 Taxation (7.000) Net profit for the year 10,000 Zungulila Led 80,000 140,000 40.000 10, 500 (5,000) S. Sod Statement of Changes in equity for the year ended 30 June, 2006. Makwebo Ltd Zungulila Lid K K Balance at 30 June, 2005 21,000 Net profit for the year 10.000 5.300 Ordinary dividends (5,000) Balance at 30 June 2006 20.000 Malwebo Lid purchased all its inventories from Zungulila Led at a profit mark-up of 25% on the cost of the goods. These goods are inventories in the records of Zungulila Ltd. Total sales from Zungulila Led during the current financial year amounted to K50,000. On 19 July, 2004 the date on which Makwebo Ltd acquired the interest in Zungulila, the retained profit of the latter amounted to K7,500. Required a) Prepare the consolidated income statement of Makwebo Ltd and its subsidiaries for the year ended 30 June, 2006. b) Prepare the consolidated Balance sheet of Makwebo Ltd and its subsidiaries as at 30 June, 2006 Question One The following are the condensed financial statements of Makwebo Ltd and subsidiary Zungulila Lud, which is partly owned: Balance sheets as at 30 June, 2006. Makwebo Ltd Zunguliland K Assets Investment in S Ltd: 64,000 ordinary shares at cost price Debtors Inventories 70,000 130,000 10,000 210.000 106, 000 30,000 136.000 100,000 80,000 Equity and Liabilities Authorised and issued share capital: K1,000 per ordinary share Retained profit Creditors 26,000 $4,000 210,000 20,000 36,000 136,000 Income statement for the year ended 30 June, 2006 Mukwebo Ltd Revenue 100,000 Cost of sales (50.000) Gross profit 50,000 Other operating expenses Profit before tax 17,000 Taxation (7.000) Net profit for the year 10,000 Zungulila Led 80,000 140,000 40.000 10, 500 (5,000) S. Sod Statement of Changes in equity for the year ended 30 June, 2006. Makwebo Ltd Zungulila Lid K K Balance at 30 June, 2005 21,000 Net profit for the year 10.000 5.300 Ordinary dividends (5,000) Balance at 30 June 2006 20.000 Malwebo Lid purchased all its inventories from Zungulila Led at a profit mark-up of 25% on the cost of the goods. These goods are inventories in the records of Zungulila Ltd. Total sales from Zungulila Led during the current financial year amounted to K50,000. On 19 July, 2004 the date on which Makwebo Ltd acquired the interest in Zungulila, the retained profit of the latter amounted to K7,500. Required a) Prepare the consolidated income statement of Makwebo Ltd and its subsidiaries for the year ended 30 June, 2006. b) Prepare the consolidated Balance sheet of Makwebo Ltd and its subsidiaries as at 30 June, 2006