Lex Ltd acquired 75% of Equity Shares of Cate Ltd on 1st September 2018. Cmphrehensive...
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Accounting
Lex Ltd acquired 75% of Equity Shares of Cate Ltd on 1st September 2018.
Cmphrehensive Income as at 31st December 2020 is as follows;
Lex
Cate
Revenue
748000
130000
Cost of sales
-320000
-78000
Gross profit
428000
52000
Distribution Cost
-85000
-6000
Admin Cost
-100000
-10000
Finance Cost
-21000
-2000
222000
34000
Dividends Received
18000
Profit Before Tax
240000
34000
Taxation
-61000
-8000
179000
26000
Retained earnings of Cate Ltd on 1st September 2018 were 4000
Additional data as at 31 December 2020 are as follows
Lex
Cate
Balance 31 Dec 2019
65000
8000
Profit for the year
179000
26000
Dividend
-130000
-24000
Balance 31 Dec 2020
114000
10000
Lex sold goods to Cate amounting to 12000 and the goods had been bought at 7000. One quarter of the goods were still held by Cate as by 31 December 2020
Goodwill on consolidation suffered an impairment loss of 15000
Required.
1.Consolidated statement of Income as at 31 December 2020
2.Extract from the consolidated statement of changes in equity showing changes in the groups retained earnings during the year 31 December 2020
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