associate question

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August 29, 2020 at 5:54 pm #582666
Cchhavi
Member
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Equity:
Ordinary shares of 25 cents
each 4,000 500 200
Share premium 800 125
Retained earnings
1 April 20X6 2,300 380 450
– year to 31 March 20X7 1760 400 150
Information
Bacup acquired 1.6 million shares in Townley on 1 April 20X6 paying 75 cents per share. On 1 October 20X6 Bacup acquired 40% of the share capital of Rishworth for $400,000.
What will be the P’s percentage in Susidiary? please reply as soon as possible
Thankyou
August 31, 2020 at 8:34 pm #582910
P2-D2
Keymaster
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Hi,
We purchased 1.6 million shares in the subsidiary out of the 2.0 million in issue. Where do we get the 2.0 million? The share capital is $500,000, the par value if $0.25 and so the number of shares in issue is $500,000/$0.25.
Thanks
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