Question 11 Not yet answered Marked out of 2 p Flag question H paid €32,000 to acquire an 80% interest (4,000 €1 shares) in the ordinary share capital of S on 1 January 20x1, when the reserves of Hands were €30,000 and €10,000 respectively

Accounting Nov 16, 2020

Question 11 Not yet answered Marked out of 2 p Flag question H paid €32,000 to acquire an 80% interest (4,000 €1 shares) in the ordinary share capital of S on 1 January 20x1, when the reserves of Hands were €30,000 and €10,000 respectively. At 31 December 20X3, H's reserves were €50,000 and s's reserves were €25,000. The consolidated group reserves as at 31 December 20x3 are: Select one: a. €62,000 O b. 260.000 C, €59,000 O d. 650.000

Expert Solution

The consolidated group reserves as at 31 December 20X3 are

(A) €62,000

Calculation:

Consolidated Group Reserve =

Parent's Reserve closing balance + Proportionate share in Subsidiary's post acquisition reserves

= €50,000 + 80% of [€25,000 - €10,000]

= €50,000 + €12,000

= €62,000

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