Joint arrangements Example – ACCA Strategic Business Reporting (SBR) lectures
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the ppe value in SFP is(6-6/10 = 5.4)
and in SPL its 0.6 … i dont get it .how this 0.6 is come from .show me your working please.
in SPL it is just the depreciation 馃檪
Hello,
Is there any need to refer study text after referring free videos and open tuition notes
Thanks
The question asks, “Show how Lyon would account for the above ….”
Can this be demonstrated by detailing the Dr’s and Cr’s or is there a need to show the extracts in the FS?
Dr PPE 6
Cr Bank 6
Dr Dep. Costs 0.6
Cr PPE 0.6
Dr Op. Costs 0.6
Cr Payables 0.6
Dr Receivables 12
Cr Revenue 12
Dr Dir Costs 8.8
Cr Payables 8.8
In Group SFP,
PPE – 5400
Receivable – 12000
Total assets – 17400
Profits(R.E) – 2000
Payables – 9400
Total equity & liabilities – 11,400
There will be a difference in group SFP of 6000/-, which I believe is of investment in PPE.
should we show that 6000 as Bank O.D and tally the SPF.
Is my understanding correct?
Or I think we should treat it as share capital – 6000/-
Because it’s mentioned in question “accounted for it’s share of the construction cost”.
Help me in understanding this?
Thank you.
Hi,
You cannot draw up an SFP as you’ve done above as you do not have a cash balance that has been adjusted following the initial entry to account for the share of the PPE. You need to process the journals and it all will still balance.
Thanks
hi sir i thought the 600 deprction is supposed to be apportioned based on share holding of 40%
Hi,
The value of the PPE has already been apportioned and so the depreciation calculated will therefore be apportioned too.
Thanks
hi sir, i dint quite get the 600 payables added with 8800
operating cost 1500*40%=600
And that 600 has been paid after the year-end