www.kaplanpublishing.co.uk Section Introducing further adjustments Question Eagle The following information will require a provision for unrealised profit adjustment to be made as a consolidation adjustment i The parent sold goods to the subsidiary for $240m at a mark-up on cost of 20% One quarter of these goods remain in the inventory of the subsidiary at the year-end ii The parent sold goods to the subsidiary for $400m at a margin of 25% Only one quarter of these goods remain in inventory of the subsidiary at the year-end iii The parent sold goods to the subsidiary at a profit of $9m, one-third of these goods were still in the inventory of the subsidiary at the year-end iv The parent sold goods to the subsidiary at a price of $24m These goods had cost the parent $18m During the year the subsidiary had sold $20m (at cost to the subsidiary) of these goods for $30m v Two years prior to the reporting date the parent transferred to the subsidiary an item of plant with a carrying value of $80m for consideration of $100m When transferred the asset had a remaining useful life of ten years Required Calculate the provisions for unrealised profit required for i to v A student's guide to Group Accounts by Tom Clendon, Second Edition, published by Kaplan Publishing www.kaplanpublishing.co.uk Section Introducing further adjustments Question Hawk Extracts from the statement of financial positions are as follows Parent $000 Subsidiary $000 Current assets Inventory Receivables 100 500 200 350 Current liabilities Trade payables 550 300 The subsidiary's trade receivables at the year-end include $200,000 due from the parent which did not agree with parent's corresponding trade payable This was due to goods in transit of $50,000 Required Prepare extracts from the group statement of financial position showing the current asset and current liabilities A student's guide to Group Accounts by Tom Clendon, Second Edition, published by Kaplan Publishing www.kaplanpublishing.co.uk Section Introducing further adjustments Question Osprey Extracts from the statement of financial position of a subsidiary that was acquired months prior to the reporting date Ordinary shares ($1) Retained earnings $ 20,000 50,000 70,000 During the current financial year the subsidiary reported a profit for the year of $10,000 Required Calculate the net assets of the subsidiary at the date of acquisition A student's guide to Group Accounts by Tom Clendon, Second Edition, published by Kaplan Publishing ...www.kaplanpublishing.co.uk Section Introducing further adjustments Question Hawk Extracts from the statement of financial positions are as follows Parent... Edition, published by Kaplan Publishing www.kaplanpublishing.co.uk Section Introducing further adjustments Question Osprey Extracts from the statement of financial position of a subsidiary that