On 1 July 2014. Ark Ltd acquired a 30% interest in Sign Ltd for $54,929,000. During the year ended 30 June 2015 Sign Ltd reported a profit (after tax) of $7,500,000 and Ark sold inventory to Sign Ltd at a markup of $180,000, 60% of this inventory was not sold by Sign Ltd and remained on hand as of 30 June 2015. Other information: Ark has significant influence over Sign Ltd. Ark Ltd has several subsidiaries and prepares consolidated financial statements. Investments in associates are recorded at cost in the single entity financial statements of Ark Ltd and using the equity method in the consolidated financial statements at the Ark Ltd Group. The tax rate is 30%. Required: Calculate the Share of Profits of Sign Ltd in the consolidated financial statements of the Ark Ltd Group for the year ended 30 June 2015. A. $1,034,964 B. $2,217,780 C. None of the other answer options is correct. D. $2,227,446 E. $2,250,000

On 1 July 2014. Ark Ltd acquired a 30% interest in Sign Ltd for $54,929,000. During the year ended 30 June 2015 Sign Ltd reported a profit (after tax) of $7,500,000 and Ark sold inventory to Sign Ltd at a markup of $180,000, 60% of this inventory was not sold by Sign Ltd and remained on hand as of 30 June 2015. Other information: Ark has significant influence over Sign Ltd. Ark Ltd has several subsidiaries and prepares consolidated financial statements. Investments in associates are recorded at cost in the single entity financial statements of Ark Ltd and using the equity method in the consolidated financial statements at the Ark Ltd Group. The tax rate is 30%. Required: Calculate the Share of Profits of Sign Ltd in the consolidated financial statements of the Ark Ltd Group for the year ended 30 June 2015. A. $1,034,964 B. $2,217,780 C. None of the other answer options is correct. D. $2,227,446 E. $2,250,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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