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in example 6 Lasma and GodaAsma has not accounted for dividends..so in W#3 (which here is not required) this divident recievable will be added to Lasma Retaned Earnings?in previos five example i dont understand dividend not added…ok u said in lecture that its already accounted for , mean when its not accounted for then we will be mentioned in the question?
lastly u are a legend …dont think of something else!Hi
In example 5, Didzis and Ansis, Ansis has declared a dividend but there is no sign of Didzis having recorded the receivability of the parent’s share – there’s no Investment Income shown in Didzis’ SoIncome. So, although Ansis has correctly accounted for the dividend, we should make the adjustment in Didzis. Dr Rble Cr ret ears, and then for the SoFP cancel the Div Rble against the same amount of Div Pble. But that means that we have correctly increased the parent’s Ret Ears. In fact, if you check the Didzis printed solution, you’ll see a working 3 which includes the adjustment for the div rble.
In Lasma and Goda, neither company has accounted for the dividend so adjustments need to be made to reflect payability and receivability, and then cancel ( if we were doing SoFP )
OMG!!!! I don’t have the most recent version of course notes in front of me but the set I have is incorrect in its treatment of the dividend from Goda.
With recent effect ( last year ) there should be no time-apportionment of the pre-acquisition element of the dividend receivable from the subsidiary. I’m just hoping that the solution in the latest set of notes shows in the proof at the end of the solution:
L’s own per q 10,000
Div from Goda 180
+ share of G post acq ret’d
((7 / 12 x 1,180) – 200) x 90% 439.5giving a total of 10,619.5
Not a big deal, but will be corrected if necessary in the next version.
Thanks for getting me to look at it again 🙂
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