H plc owns 70% of the the voting shares of S plc. S plc is a subsidiary of H plc. The most recent income statements of each company include the following entries: H plc S plc £ £ Interest receivable 317,000 206,000 Finance charges 145,000 230,000 Two years' previously H plc made a loan of 765,000 to S plc which is repayable in full in 4 years' time. The loan bears interest at 6% a year. What figure will be reported in the Consolidated Income Statement of H plc for 'Finance charges'?

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
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H plc owns 70% of the the voting shares of S plc. S plc is a subsidiary of H plc.
The most recent income statements of each company include the following entries:
H plc
S plc
£
£
Interest receivable
317,000
206,000
Finance charges
145,000
230,000
Two years' previously H plc made a loan of 765,000 to S plc which is repayable in full in 4
years' time. The loan bears interest at 6% a year.
What figure will be reported in the Consolidated Income Statement of H plc for 'Finance
charges'?
Transcribed Image Text:H plc owns 70% of the the voting shares of S plc. S plc is a subsidiary of H plc. The most recent income statements of each company include the following entries: H plc S plc £ £ Interest receivable 317,000 206,000 Finance charges 145,000 230,000 Two years' previously H plc made a loan of 765,000 to S plc which is repayable in full in 4 years' time. The loan bears interest at 6% a year. What figure will be reported in the Consolidated Income Statement of H plc for 'Finance charges'?
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