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the summarised statements of profit or loss and other comprehensive income for the companies for the year ended 31 March 2014 are:
—————–Penketh—– Sphere
Revenue ——620,000— 310,000
Cost of sales (400,000)- (150,000)
—————––––––––– ––––––––
Gross profit —-220,000 160,000
Distribution costs (40,000)– (20,000)
Administrative expenses (36,000)– (25,000)
Investment income 5,000– 1,600–assume that we ignore investment income here
Finance costs (2,000)– (5,600)
–––––––– ––––––––
Profit before tax 147,000– 111,000
Income tax expense (45,000) (31,000)
—————————- –––––––– ––––––––
Profit for the year ———-before(102000-5000)97000— before(80,000-1600)-78400
Dividend received———- 5000—-1600
retained profit for the year-92000—76800Is that possible to remove investment income under administrative expense and put it under profit after tax as dividend then deduct it from profit after tax to identify retained profit?
Also, is Investment income can be admitted as dividend ?if yes no need to answer the question below.If not why we deduct dividend pay or declare by Sco from investment income of PCO usually it should be dividend received
In pandar for instance, there is investment (dividend and interest)9500-(2000)interest=7500 this amount is
Sco declares 8000 dividend pay and i find Pco’s share(PANDAR) and deduct it from 7500
I think pandar share is 80% so 7500-6400(8000*80%)Why we deduct i usually deduct dividend declare by Sco or Associate from investment income when i see investment income given.But partly understand but not 100%
Need explanation, this is last part in consolidation that is my weak side
“Is that possible to remove investment income under administrative expense and put it under profit after tax”
No, it belongs in the exact place you you see it and it does NOT belong below ‘profit after tax’
“then deduct it from profit after tax to identify retained profit?”
This is totally illogical!
Retained profit is profit after tax less dividends PAID, not dividends received as per your post
“Also, is Investment income can be admitted as dividend ?”
This question I simply do not understand – maybe the word ‘admitted’ is incorrect
“If not why we deduct dividend pay or declare by Sco from investment income of PCO usually it should be dividend received”
This is simply the process of cancellation carried out in the event of preparation of a consolidated statement of profit or loss
“Why we deduct i usually deduct dividend declare by Sco or Associate from investment income when i see investment income given”
Because if we don’t eliminate the dividend received from the subsidiary and the associate then we will continue to show in the consolidation dividends paid to us and received by us – remember, we treat the entire group as being a single entity
OK?
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