Red owns 80% of White & 40% of Blue. At acquisition White/Blue reserves were £16,000 and £8,000 respectively. White non-current assets were revalued by £4,000 at that time. All relevant group/company data is shown below. Balance Sheets at 31-Dec-21 Non-current assets Investment in White Investment in Blue Other Net Assets £1NV Shares Reserves Profit/Loss Other Liabilities Red 48,000 White 24,000 Blue 10,000 40,000 10,000 20,000 30,000 22,000 118,000 54,000 32,000 40,000 25,000 10,000 54,000 23,000 14,000 14,000 6,000 8,000 10,000 118,000 54,000 32,000 Required: For the Red group at Ye-Dec-21 prepare a) Group Balance Sheet, b) Group Income Statement, and c) Explain the rationale for group accounts. For controlling/non-controlling interests calculate d) Return on Equity, and e) Earnings per Share
Red owns 80% of White & 40% of Blue. At acquisition White/Blue reserves were £16,000 and £8,000 respectively. White non-current assets were revalued by £4,000 at that time. All relevant group/company data is shown below. Balance Sheets at 31-Dec-21 Non-current assets Investment in White Investment in Blue Other Net Assets £1NV Shares Reserves Profit/Loss Other Liabilities Red 48,000 White 24,000 Blue 10,000 40,000 10,000 20,000 30,000 22,000 118,000 54,000 32,000 40,000 25,000 10,000 54,000 23,000 14,000 14,000 6,000 8,000 10,000 118,000 54,000 32,000 Required: For the Red group at Ye-Dec-21 prepare a) Group Balance Sheet, b) Group Income Statement, and c) Explain the rationale for group accounts. For controlling/non-controlling interests calculate d) Return on Equity, and e) Earnings per Share
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Red owns 80% of White & 40% of Blue. At acquisition White/Blue reserves were £16,000
and £8,000 respectively. White non-current assets were revalued by £4,000 at that time.
All relevant group/company data is shown below.
Balance Sheets at 31-Dec-21
Non-current assets
Investment in White
Investment in Blue
Other Net Assets
£1NV Shares
Reserves
Profit/Loss
Other Liabilities
Red
48,000
White
24,000
Blue
10,000
40,000
10,000
20,000
30,000
22,000
118,000
54,000
32,000
40,000
25,000
10,000
54,000
23,000
14,000
14,000
6,000
8,000
10,000
118,000
54,000
32,000
Required:
For the Red group at Ye-Dec-21 prepare
a) Group Balance Sheet,
b) Group Income Statement, and
c) Explain the rationale for group accounts.
For controlling/non-controlling interests calculate
d) Return on Equity, and
e) Earnings per Share
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