when the legal ownership of goods passed to Libra Ltd.

| September 12, 2018

.150 million of components to Libra Ltd. on 31 May 2002, when the legal ownership of goods passed to Libra Ltd. Due to a problem in shipping, these goods were received by Libra Ltd. on 30 June 2002. Nyakuzi Ltd. made a profit of 20 per cent on selling price of the component. All of the goods had been utilized in the production process at 31 October 2002 but non of the finished goods had been sold at that date. Libra Ltd. had paid for the goods on 31.7.2002. This was the only inter-company transaction in the year. Foreign exchange gains/losses on such transactions are included in cost of sales by Libra Ltd.A dividend of Ksh. 40 million had been paid by Nyakuzi Ltd. during the year.The following exchange rates were relevant:Dinar to Ksh31 October 20001 November 20011 April 200231 May 200231 June 200231 July 200231 October 2002Weighed average for year to 31 October 2002565.35.25.14.245The directors have indicated that Libra Ltd. operates as a separate entity with little management interference from the holding company.Required:(a). A consolidated income statement for the year ended 31 October 2002 (15 marks)(b). A consolidated balance sheet for Nyakuzi Ltd. group as at 31 October 2002 (10 marks) (Show any exchange gains/losses arising in the consolidated financial statement) (Total: 25 marks)

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