On 1 April X7 Jenny CO acquired 60% of the equity share capital of Donna CO for $100,000. During the year Jenny CO sold goods to Donna CO for $10,000. including a gross profit of 25%. 40% of these goods were still in inventory at the year end.
The following extract was taken from the financial statements of Jenny Co and Donna Co at 31 March X8
| Jenny CO | Donna CO | |
| Revenue | 400,000 | 800,000 |
| Cost of sales | 220,000 | 360,000 |
| Gross Profit | 180,000 | 440,000 |
What is the consolidated gross profit of the Jenny group at 31 March X8?
Suggested solutions:
| Gross Profit Jenny CO | 180,000 |
| Gross Profit Donna CO | 440,000 |
| less Adjustment to gross profit | 1,000 |
| Answer: | 619,000 |
Working:
Adjustment = Goods sold X margin X % still in inventory
= 10,000 X 0.25 X 0.4
= 1,000
To do the same topic again in ACCA F3 consolidated gross profit
To do another topic in ACCA F3
2015 ACCA F3 CONSOLIDATED GROSS PROFIT