Page 204 - Microsoft Word - 00 IWB ACCA F7.docx
P. 204
Chapter 17
Example 1
Standard workings
On 1 April 20X6 Pepper purchased 90% of Sauce’s share capital at a cost of
$19 million. At this date the balance on Sauce’s retained earnings was $3
million.
The statements of financial position of the two companies at 31 March 20X7
are shown below.
Pepper
$000 $000
Non-current assets
Property, plant and equipment 23,000 13,000
Investments 19,000 –
——— ———
42,000 13,000
Current assets 8,500 3,200
——— ———
50,500 16,200
——— ———
Equity
Share capital $1 ordinary shares 30,000 10,000
Retained earnings 13,100 4,200
——— ———
43,100 14,200
Current liabilities 7,400 2,000
——— ———
50,500 16,200
——— ———
198
