Issue C CONVEX Ltd. is planning to sell 30% of their shares to another company who wants to support local production of the vaccine. How will this transaction affects the preparation of CONVEX Ltd. financial statements for the next accounting period?
CONVEX Ltd. is a new company that was established on 1st January, 2020 to oversee the
production of coronavirus vaccines for Nigeria . On 1st July, 2020, CONVEX Ltd. acquired 75%
shares in CONCAVE Ltd., a pharmaceutical company, to speed up the vaccine production. As a
new graduate, CONVEX Ltd. has employed you as their accountant. At a management
meeting held, a number of issues were raised about how CONVEX Ltd. should deal with its
transactions and investment in CONCAVE Ltd. and the need to conduct financial ratio analysis to
determine the profitability and sustainability of CONCAVE Ltd. In a memo to management,
provide your views on how the following issues should be addressed.
Issue C
CONVEX Ltd. is planning to sell 30% of their shares to another company who wants to support
local production of the vaccine. How will this transaction affects the preparation of CONVEX Ltd.
financial statements for the next accounting period?
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