uity shares in Frais on 1 January 20X1. During entory to Frais at a sales price of £50,000. None d a margin of 20%. ofit or loss for the two entities are shown below Frais £000

Principles of Accounting Volume 1
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ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter15: Partnership Accounting
Section: Chapter Questions
Problem 4EA: Cheese Partners has decided to close the store. At the date of closing, Cheese Partners had the...
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Fromage purchased 80% of the equity shares in Frais on 1 January 20X1. During the year ended 31
December 20X1, Fromage sold inventory to Frais at a sales price of £50,000. None of the goods remained
in Frais' inventory. Fromage applied a margin of 20%.
Extracts from the statement of profit or loss for the two entities are shown below:
Fromage
Frais
£000
£000
Revenue
1,000
750
Cost of sales
(650)
(250)
What would be the revenue and cost of sales figures reported in the consolidated statement of
profit or loss for the year ended 31 December 20X1?
Answer to the nearest £000
a.
Revenue 1700 Cost of sales 850
O b. Revenue 1750 Cost of sales 910
O c. Revenue 1700 Cost of sales 860
d. None of these options are correct
Revenue 1550 Cost of sales 800
Transcribed Image Text:Fromage purchased 80% of the equity shares in Frais on 1 January 20X1. During the year ended 31 December 20X1, Fromage sold inventory to Frais at a sales price of £50,000. None of the goods remained in Frais' inventory. Fromage applied a margin of 20%. Extracts from the statement of profit or loss for the two entities are shown below: Fromage Frais £000 £000 Revenue 1,000 750 Cost of sales (650) (250) What would be the revenue and cost of sales figures reported in the consolidated statement of profit or loss for the year ended 31 December 20X1? Answer to the nearest £000 a. Revenue 1700 Cost of sales 850 O b. Revenue 1750 Cost of sales 910 O c. Revenue 1700 Cost of sales 860 d. None of these options are correct Revenue 1550 Cost of sales 800
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