Following K’s additional investment in L, the directors of K took a strategic decision to
concentrate on the core business of the group. Following this decision, K sold all its
shares in another subsidiary M on 31 May shortly before the year end. The parent K
had held 70% of subsidiary M. The proceeds of sale were credited to a suspense
account in the books of K. No further entries have been made in connection with the
sale. Income tax will be payable in connection with the sale.0n 1 Aug at the year start, K sold a freehold property to X, a finance company. K
had purchased the property for $500,000. On 1 Aug K had accumulated total
depreciation of $60,000. The property had at least 30 years of useful life remaining
at that time.