OpenTuition.com Free resources for accountancy students
Free ACCA lectures and course notes | ACCA AAT FIA resources and forums | ACCA Global Community
ACCA F7 lectures Download F7 notes
May 13, 2015 at 5:15 pm
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
October 4, 2014 at 2:47 pm
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..
September 29, 2014 at 9:05 pm
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?
September 29, 2014 at 9:07 pm
Posted the question before watching full lecture
September 30, 2014 at 7:04 am
Show the working
March 22, 2014 at 12:43 pm
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.
March 22, 2014 at 6:03 pm
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
March 20, 2014 at 8:46 pm
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?
March 6, 2014 at 7:14 am
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.
February 26, 2014 at 12:58 pm
sir i m so impressed the way you dealt with pups ..u make it understand very easy.. thank you sir… god bless you…
January 29, 2014 at 9:45 am
I understand the mark up and margin. The URP. And it doesn’t matter. Who we deduct the inventory from
But could you please clarify the retained earnings again. Still not fully 100%. Clear please
Thank you very much
January 30, 2014 at 1:50 pm
The question that gives the answer “In the seller’s books” is what you need to understand! “Which company has recognised the profit on the intra-group sale?” Now, is that profit actually realised so far as the group is concerned? NO! The profit is not achieved simply by transferring goods from one trouser pocket to another. So the adjustment to eliminate the profit must be in the records of the company that has recorded that profit – and that’s the selling company.
Is that better?
December 3, 2013 at 2:26 pm
in the exam is it allowed to start with the workings on the first page, then the full statement after?
December 3, 2013 at 2:28 pm
I cannot see how else you could do it!
Yes, that’s fine
November 28, 2013 at 8:31 pm
Hello Mike and anyone else able to help; on example 2 on p. 51 (Signe and Petras), it says the retained earnings for Signe is 0 as it’s not had time to make earnings yet. I understand this idea, but the accompanying balance sheet in the notes indicates retained earnings of $150 000 which I find confusing; how is the retained earnings zero but $150 000 on Signe’s books?
November 28, 2013 at 9:28 pm
Hey Monica, it seems as though Signe made a profit of $150,000 during the year ended 31 dec 2009. Ie profit in its first year of trading.
November 28, 2013 at 8:15 pm
Hello Mike and anyone else able to help; on example 2 on p. 51 (Signe and Petras), your workings indicate that the retained earnings for Signe is 0 as it’s not had time to make profits yet. I understand this idea, but the accompanying balance sheet in the notes indicates retained earnings of $150 000 which I find confusing; how is the retained earnings zero but $150 000 on Signe’s books?
Many thanks in advance for your help!
December 3, 2013 at 2:29 pm
For working W2, Goodwill, Signe had achieved NO retained earnings because the acquisition was on the date of Signe’s incorporation. Some time later, as at the date when the consolidation is to be prepared, Signe has accumulated $150,000
November 23, 2013 at 6:55 pm
sir, in the notes it is written that when an inventory is sold at a profit within the group, “we should calculate the unrealised profit included in inventory and note the adjustments to inventory and retained earnings on the face of the question paper. BOTH SIDES OF THE ADJUSTMENT should be must be made to the entity which has recognised this unrealised profit i:e the selling entity”
my question is why BOTH sides of the adjustments should be made to the selling entiy?….the selling entity does no longer have that particular inventory in his books, so why we would reduce something which is not their at all in the first place….after the sale has occurred, the inventory will be in the buyers book, and the buyer is the one who would have overvalued his inventory, so should’nt we reduce the amount in the buyers account.?……….
November 13, 2013 at 9:33 pm
Mike, your lectures are fantastic. I was completing this course using only bpp textbooks up until now, and the F7 paper made me want to quit. Luckily I found this site and using your lectures it is really starting to make sense and now I will “always, only, ever” try and convince other students that they need to join this site. Thank you so much!!
November 14, 2013 at 7:17 am
That’s the way! And good luck with your exams
November 12, 2013 at 9:42 pm
Do you cover Deferred Consideration, investments using Share Capital and Associates in the CSOFP lectures?
Thanks (good lectures by the way)
November 13, 2013 at 6:31 am
Not on recorded lectures – but there are 7 mini-exercises at the back of the course notes for you to practice on – and it’s really likely that this will feature in the December 2013 F7 exam
September 22, 2013 at 2:20 am
Hello, My question is : Why is it that when calculating the NCI Interest for the balance sheet, we use the figure for R.E. which has been adjusted for Intra – group pup? As the NCI is not part of the group will their share of the R.E. be the full amount (150 in this example as opposed to the 138). Just as we do not include them in any bargain purchases.
September 15, 2013 at 3:46 am
pls tell again how come we know there is no g/will?
September 15, 2013 at 9:00 am
I need a chapter and page reference if I’m to answer this!
September 15, 2013 at 9:01 am
And the name of the characters in the question
July 5, 2013 at 5:05 pm
Thanks Mike Little!
June 29, 2013 at 9:47 pm
hello, S sold goods to P for 60,000, the current asset of P increases by 60 but wouldn’t there also be either an increase in payables or a decrease in cash?
June 30, 2013 at 8:56 am
Yes – so what is your question?
July 1, 2013 at 9:39 pm
Well I’m seeing the increase in the current asset but I’m not seeing the decrease in cash nor increase in payables.
July 3, 2013 at 9:03 am
Are these “goods in transit” or did the transaction take place during the year?
July 4, 2013 at 10:12 pm
June 1, 2013 at 2:42 am
Excellent Lectures!!! Thank You Mr Little.
May 12, 2013 at 11:32 am
If i dont do an adjustment of PuP in the Consolidated R.E but I do it on the face of the question (adjusting calculated R.E with the PuP) I still balance the question except that I have slightly different figures for NCI and Retained earnings!!! would i still be awarded marks for such dealing??
February 12, 2013 at 3:04 am
Mr. Little I am currently doing the goodwill mini exercises on pg189. Part (b) of Q#1 – the NCI valuation in the answer is $384,000. I worked out 30% of $1,200,000 (FV of NA at DOA) and got $360,000. Can you explain how you arrived at this figure please?
February 12, 2013 at 3:40 am
Mr. Little I’ve just worked it out. I was working out the proportionate share which is part (c), instead of taking the NCI % of the total shares multiply by the share price.
November 30, 2012 at 7:20 pm
No Doubt OT is Best !!! And the teacher like Mr.Mike are really Good!
But the only thing is i can’t find the Lecture on Preparation of Company’s Financial Statements..! The reason being these are taught at f3 or what ? plz commet
November 28, 2012 at 9:40 am
Oh dear, it has been a rather long night. lol
November 28, 2012 at 10:50 am
November 28, 2012 at 3:03 am
With regards to W3, why is it that the pre acquisition profit for the sub is 0? Why do we not deduct the entire 138?
I’m asking because above in W2, the FV of SNA@DOA, retained earnings were carried as 0, meaning that there were none @ DOA, so all RE would be Pre acquisition.
Am I going about this right?
In short, why is the 138 not deducted ftom the sub in W3?
November 28, 2012 at 6:53 am
@marcp, You’ve just said that in W2 the retained earnings were zero. If that’s the case, then surely all the retained earnings are POST ACQUISITION!
June 4, 2012 at 6:17 pm
so if you reduce the value of the inventory, that would INCREASE the cost of sales and therefore reduce the profit
Technically, the double entry will involve reducing the value of closing inventory both on the balance sheet and within the cost of sales. So Debit Cost of Sales 12,000 in the Statement of Income and Credit Closing Inventory on the Balance Sheet.
The first part of the entry reduces profits ( because costs have increased ) and the second part balances the fall in profits by reducing the assets on the balance sheet
June 4, 2012 at 5:58 pm
because the inventory is over valued by that amount.
May 10, 2012 at 7:08 pm
hello sir if the S sell to P…. i understand he makes an unrealised profit of 12000. why does he have to reduce inventory as well???
You must be logged in to post a comment.
OpenTuition.com is dedicated to providing all accountancy students throughout the world with the resources they need to study for the major … Learn more
Please log in to get the most from OpenTuition, registration is free!