Forum Replies Created
- Posts
I am extremely sorry Sir. 🙁 I didnt see its ‘ask the tutor’ page and just replied. I will never repeat my mistake ever again…….. I am very sorry again. 🙁
6% loan notes (5,000,000 shares x 80% x 100/500*)= $ 800,000
This consideration on acquisition of $800,000 is deducted from Premier’s investments (i.e 1,800,000) because ‘investment in subsidiary’ in the statement of financial position of the parent company is excluded when preparing the consolidated statement of financial position.
Statement of financial position( extracts)
Non current assets
Available-for-sale investments (1,800 – 800 consideration + 300 gain) 1300
Equity
Other equity reserve (500 + 300) 800
============================================================
The investments are always shown on the asset (i.e Non current asset) side.
Intra-group investments [i.e One entity(parent) investing in the other entity(subsidiary) ] are not shown in the SFP.
Available-for-sale investments= 1800 (figure from the given SFP- Premier) – 800 ( consideration for acquisition by Premier) + 300 ( increase in the value = gain)
300 is also added to the other equity reserves in Equity and Liabilities section because 300 is increase in value i.e a gain and the question its self states that “The other equity reserve relates to these investments and is based on their value as at 30 September 2009” .
therefore any gain/ loss relating to this investment will be added /subtracted for the other equity reserves.List price* X
less: Employee capital contribution (max 5000) (X)
____
X
x Appropriate % x months car available for/12** X
____
X
less: Employee’s contribution to running cost
(e.g. Private use of the car) (X)
____
Benefit XX*The discounted price is not relevent
** If the car is not available for the full year e.g if it was provided on 6 Jan 2014 ie only 3 months available in 2013/14 the calculation would be = x Appropriate % x 3/12I hope this is helpful 🙂