Homework Answers
calculation of income effect for the year ending dec 21- 2021
particulars upto oct 2021 = 10 months after nov 2021= 2 months
profit before any adjustment 364000+18000(patents cost) 318333 63667
less:- extraordinary loss 100000 nil
less:- patents cost 15000 3000
total 203333 60667
share holding 36% 27%
income to be consolidated 73200 16380
b) extraordinary loss of 100000 is included in 73200 profit as stated above which is 36% of shareholding.
c) gain / loss on sale of investment are as follows
investment on jan 1, 2021 270000
add:- income upto oct 73200
total:- 343200
for 30000 share total investment is 343200
so for 7500 shares investment is 343200/30000*7500= 85800
sale value- 82000
less investment value- 85800
loss on sale- 3800
stock reserve is not taken in calculation as it is lying on dec 2021 which is not considered in gain /loss
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