Reference no: EM133122608
Questions -
Q1. Trader plc sold the goods to Shops plc for a price of £6,500 paid in cash.
Trader plc owns 100% of the share capital of its subsidiary Shops plc.
The following transactions took place during the financial year ending31 December 20X0: Trader plc purchased goods from Supplier Inc (an unrelated entity), for a price of £5,000 paid in cash.
Shops plc sold 60% of the goods to Client Inc (an unrelated entity) for a price of £5,500 paid in cash.
(a) Compute the amount of revenue, cost of sales and resulting profit which should be included in Trader plc's consolidated income statement for the year ending 31 December 20X0.
(b) Provide the bookkeeping entries for the cancellations of intra-group items on consolidation.
Q2. Company A owns the following investments:
- 80% of Company B's share capital
- 100% of Company C's share capital
Company A controls both companies B and C.
The following dividends were paid during the year 20X1:
- Company A paid £90,000
- Company B paid £120,000
- Company C paid £100,000
Calculate the total amount of dividends paid that should be reported in Company A's consolidated statement of cash flow for the year 20X1. Show your workings.