Comments

  1. avatar says

    Please Can u explain why we had to reduce the 12,000 inventory from the Consolidated balance sheet whereas we have added it back to the subsidiary we bought it from to cancel inter-group trading. Also why did we not apply the same principle to the liability where we may have the parables which have been reduced by 12,000 in order to cancel the inter-group trading. We did not even touch or bring in the effect of the adjustment into it
    Thanks

  2. avatar says

    you ‘re great..i pass f3 with open tuition)) now i hope will pass f7 with your help again..i have question about this example. Why we do not reduce 60 000 in other assets (as receivables) and liabilities (as payables) in CSofFP ??
    Thank you in advance..

  3. Profile photo of allenmendonca says

    do we show this working as part of our working notes to show the examiner how we are arriving at the figures or do we just write in the question paper?

    And can we write notes on the question paper in our reading time to make it easier while solving?

  4. avatar says

    I was thinking the PUP deduction in the inventory value should be from the buying company, Petras. Is the 70,000 inventory value in Signe not the closing balance after the sales? Petra has received the goods and displayed it on its balance sheet at purchased price of 60,000 including the PUP. Mike pls kindly clarify sir. Thanks so much.

    • Profile photo of MikeLittle says

      The question is not “Whose inventory is overvalued?” the question is “Whose profits are overstated?” and it’s the selling company that is overstating profits so far as the group is concerned

      Ok?

  5. avatar says

    Thank you for all the detailed explanations on the PUPs. I would have a question regarding the NCI computation, normally since the subsidiary is a completely different entity, from the point of view of the NCIs the profit was realized as the subsidiary has sold the goods (they don’t care whether these were sold to the parent or outside) . Shouldn’t the PUP affect only the Group retained earnings and not the NCI?

  6. Profile photo of wasty says

    Mike, you have a talent in making difficult things easy for people like us. You guys are a blessing to us. I have studied this things from several tutors and failed to really understand it, and I must say, you are the man. You are the magic man. with your lectures, I am solving all PUPS and the other consol questions with ease and speed.
    God bless you.

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