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This mayb outside the scope of F7 but if the following year, the rest of the goods is sold, is the eliminated pup reinstated to a/c for the realised profit?
U mean the parent co. always makes an unrealised profit when selling to its sub n if the goods are not sold by the end of the year, the whole unrealised profit is eliminated.
N if say 2/3 of the goods r sold to outside customers, it woud mean that 2/3 of the unrealised profit made at first when selling to sub has been realised. Therefore both parent n sub can safely recognise the realised portion of the transaction n eliminate the unrealised profit made on the remaining yet unsold 1/3.
Is that correct?
Since we don’t get to see the lecture for e.g 7, i don’t know if it was treated like e.g 8 & 9 but i’d assume so coz u do refer back to it in e.g 8.
In the answer to e.g 8, there is no mention of the value of nci investment of $55,000 mentioned in e.g 7. Does it mean that if we’re told that ” Guido’s shares were worth $1.65 immediately before the acquisition by Ivona” , the value of nci investment given in eg.7 does not stand anymore or do we have to ignore nci investment of $55,000 given in eg.7 for the sake of e.g 8?
Thank you.