question archive Soya's consolidated statement of financial position shows inventories with a carrying amount of £36,000 at 31 December 20X0 and £34,600 at 31 December 20X1

Soya's consolidated statement of financial position shows inventories with a carrying amount of £36,000 at 31 December 20X0 and £34,600 at 31 December 20X1

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Soya's consolidated statement of financial position shows inventories with a carrying amount of £36,000 at 31 December 20X0 and £34,600 at 31 December 20X1.

Soya acquired a subsidiary Milk on 1 October 20X1 when the inventories of Milk were £3,600.

The Consolidated statement of cash flow is prepared for the year ended 31 December 20X1 using the indirect method, which provides a reconciliation of profit before tax to cash from operating activities.

What ajustment should be recorded for "change in inventories" in this reconciliation?

Hint: Pay careful attention to the sign (+/-)

O a. Change in inventories — 2,200

O b. Change in inventories + 2,200

O c. None of these options are correct

0 d. Change in inventories -1,400

0 e. Change in inventories — 5,000

O f. Change in inventories + 5,000

O g. Change in inventories +1 ,400

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