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Sir
Can you please explain the calculation of Ex-5 from Chapter 10 Open Tuition Course Notes?
What is the difference in calculation when RE b/f and c/f given? Why did you calculate separately?
Thank you.
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On 1 July 2001 Didzis acquired 75% of Ansis for $65,000. The balance on Ansis’ retained earnings was $18,000 at that date. Ansis had equity
share capital of 20,000 shares of $1 each. Goodwill had been impaired by 75%, and the Didzis’ directors now wish to impair it fully.
Details for both entities for the year ended 30 June 2009 were:
Didzis Ansis
$’000 $’000
Revenue 300 160
Cost of sales 192 105
Gross profit 108 55
Distribution costs 18 10
Administrative expenses 14 17
32 27
Profit before tax 76 28
Income tax expense 21 16
Profit after tax 55 12
Dividends 17 8
Retained profits for the year 38 4
Retained earnings brought forward 174 37
Retained earnings carried forward 212 41
It is company policy to value the NCI as their proportionate share of the fair value of the net assets
Prepare the Consolidated Statement of Profit or Loss and Other Comprehensive Income of the Didzis Group for the year
ended 30 June 2009, and calculate the figure for retained earnings to be shown on the Statement of Financial PositI use the Didzis example to introduce the concept of how similar it is to calculate retained earnings, whether it be retained earnings carried forward, brought forward or even “for the year”
In addition, it serves as an introduction to statement of changes in equity but you will NEVER be asked for a statement of changes in equity in question 1 (you could easily be asked for one in question 2)
Ok?
Thank you.
PS: I am amazed by the fact that you reply so quickly! Thank you kindly for all your help 🙂
It seems that you are also awake with the students to answer their queries asap 🙂 🙂
Much appreciated!
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