Advanced Financial Accounting

Running head: ADVANCED FINANCIAL ACCOUNTING
Advanced Financial Accounting
Name of the Student:
Name of the University:
Author’s Note:

1ADVANCED FINANCIAL ACCOUNTING
Table of Contents
Individual Financial Statements:................................................................................................2
Consolidated financial statements:.............................................................................................3
Notes supporting the arguments of preparing consolidated financial statement:......................4
Separate Legal Entity:............................................................................................................4
Holding subsidiary relationship:............................................................................................5
Concept of one economic entity for consolidation:...............................................................5
Historical cost concept:..........................................................................................................6
Concept of revenue recognition:............................................................................................6
Matching principle:................................................................................................................7
Importance of consolidated financial statement:....................................................................7
Bibliography:..............................................................................................................................8

2ADVANCED FINANCIAL ACCOUNTING
Individual Financial Statements:
Extract of Individual Income Statement
Pirate Ltd Sailor Ltd Pirate Ltd Sailor Ltd Pirate Ltd Sailor Ltd
Sales revenue -$ -$ -$ 125,000$ 162,500$ -$
Cost of goods -$ -$ -$ 100,000$ 125,000$ -$
Gross profit -$ -$ -$ 25,000$ 37,500$ -$
Expenses:
- -$ -$ -$ -$ -$ -$
- -$ -$ -$ -$ -$ -$
- -$ -$ -$ -$ -$ -$
- -$ -$ -$ -$ -$ -$
Total expenses -$ -$ -$ -$ -$ -$
Profit before tax -$ -$ -$ 25,000$ 37,500$ -$
Income tax expense -$ -$ -$ 5,000$ 7,500$ -$
Profit after tax -$ -$ -$ 20,000$ 30,000$ -$
October November December
Particulars