Wear Practice Q5

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April 15, 2014 at 4:06 pm #165353
abc123456
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Hello, can you help to work out the % of associate company please? It says total Investment of Wear is 218. it comprise solely Wear’s investment in Seat 128 and in Bow 90. The answer is Wear owns 60% of Seat and 30% of Bow. thanks.
April 15, 2014 at 4:21 pm #165354
MikeLittle
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It depends on how many shares were acquired and I certainly cannot work out the answer for you unless you tell me the share capital of Bow together with either (1) how many shares were acquired in Bow, or (2) how much was paid per share acquired in Bow.
April 15, 2014 at 4:24 pm #165355
abc123456
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It says 48,000 shares in Seat were acquired when it’s retained earnings were 20,000.
and 15,000 in Bow when ret earn were 150,000 (it is another note so i thought it is not relevant for this calculation) thanks
April 15, 2014 at 4:26 pm #165356
MikeLittle
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I’ve just checked the question! It says 15,000 shares were acquired in Bow. Bow’s share capital is 50,000 $1 equity shares. 15,000 as a percentage of 50,000 is 30%

Where’s the problem?
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