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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Consolidation
X Co acquired 80% of the equity share capital in Y Co on 31 July 20X6. Extracts from the 2 companies’ statement of profit or loss for the year ended 30 September 20X6 were as follows:
Revenue (X Co) = 3.4 million Cost of sales (X Co) = 1.5 million
Revenue (Y Co) = 2.4 million Cost of sales (Y Co) = 1.8 million
During the year ended 30 September 20X6, Y Co sold goods for $5,000 each month to X Co, at a mark up of 25%. At the end of the year X Co had 50% of these goods left in inventory.
What is the group profit for the year ended 30 September 20X6?
Sir in this question for group gross profit unrealised profit would be 1000
But in inventory 50% of 60000 i.e. 30000 will be present .So will we subtract 1000 or 6000( 1000×12×50%) in sofp inventory?
Only the purp since the date of acquisition.
So sir only 1000 …right ?
Hence purp in p/l = purp in sofp
Correct 🙂
Thanks sir
You are welcome.
