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Sir,
The question is from CPA Australia module (Financial accounting & reporting)
another one question is :
Ed Co. has owned 100 per cent of the shares in Clem Co. for five years. These were bought for $450,000 when the net assets of clem co. were $415,000. In the year of acquisitions, Clem Co. was impaired by $5000 due to drop in profitability. Clem CO. has again suffered a loss of profits in the year ended 31 December 20X9, and accordingly goodwill is to be impaired by 20 per cent of book value. Extracts from the two companies’ statements of profit or loss are as follow:
Ed CO. Clem Co.
Cost of sales 320,000 126,000
administrative expenses. 100,000. 36,000What are the amounts to be reported for group cost of sales and administrative expenses ?
the answer is COGS = $446,000, Administrative expenses = $142,000
The working as per below :
ED CO. – $100 + Clem co . – $36 + impairment (450K-415K-%K) – $6K = $142K
Understand that goodwill impairment is charge to administrative expenses. But I dun understand the working for impairment. The question mentioned goodwill is to be impaired by 20 per cent of book value, but why we need to use the consideration transfer minus net asset minus and minus impaired $5K?
Hi guys, i’m looking for study buddy for this subject. Would you guys mind to become my study buddy?
sir,
Why In this question we are using profit after tax, but the formula for RI is using PBIT?
sir,
Is this ARR is included in F2 syllabus? I can’t find this topic. Can you explain how to get 34,000 & 160,000?
I have watched on this chapter. I will watch one more time to make it more clear. Thanks sir.
Additional question from me. As we known n = number of periods. But sometime n = month, sometime n=year. Could you make me clear on this issue?