Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › June 2014 exam
- This topic has 1 reply, 2 voices, and was last updated 7 years ago by MikeLittle.
- AuthorPosts
- February 27, 2017 at 2:28 am #374434
HI sir for June 2014 exam, question on Penketh, Regarding the sales between the parent and the associate,
the Unsold inventory = 15000
Therefore PURP
= 25/125 x 15000
= 3000A% of PURP
= 30% x 3000
= 900Therefore, the only adjustment to the SOPL would be to minus this 900 from the ‘Share of profit of Associate’.
‘Share of profit of Associate’ = (A% x A’s PAT) – Current year impairment – PURP
= (30% x 10000 x 6/12) – 0 – 900
= 600But in the answer key they didn’t minus off the PURP from the Share of profit of associate.
February 27, 2017 at 7:55 am #374483Penketh’s share of Ventor’s profit after tax is shown as:
“Share of profit from associate (10,000 x 30% x 6/12) $1,500 and there is an addition to cost of sales of $900 being 30% x $3,000 pup
That gives us a net figure of $600 contribution to consolidated retained earnings
If you take the full $3,000 to the Ventor retained earnings (6/12 x $10,000) that leaves us with $2,000 post-acquisition profits in Ventor
Take 30% of that figure and you arrive at a contribution to consolidated retained earnings of $???
If you prefer to tackle the issue in the way that BPP and Kaplan do, that’s fine
I believe that my way is easier
OK?
- AuthorPosts
- The topic ‘June 2014 exam’ is closed to new replies.