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Sir.
,
in the paradigm question
while goodwill calculation there is a loss of 6 million which i cant understand at all as to what is happening..
and that beginning part of what we do with the 40% mark upthe rest was very helpful.
thank youFrom the question:
“Retained earnings/(losses) – at 1 April 2012 (4,000)”
and, also from the question, the first sentence in note (i)
“At the date of acquisition, Strata produced a draft statement of profit or loss which showed it had made a net loss after tax of $2 million at that date”
So there’s the $(6,000,000)
Note (ii) refers to the mark up that Paradigm normally charges. However, in the case of sales to Strata, Paradigm has reduced its selling price from cost + 40% to cost + 15%
So those goods in Strata valued at $4,600,000 should really have a cost price to Strata of $5,600,000 ($4,000,000 + 15% = $4,600,000 whereas $4,000,000 + 40% = $5,600,000)
Does that explain it for you?
OK?
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