Forum Replies Created
- Posts
Oh, I am sorry.
Brand Co has the following results for the year ended 31 December 20X7.
Net profit for year $1,200,000
Weighted average number of ordinary shares outstanding during year 500,000 shares
Average fair value of one ordinary share during the year $20.00
Weighted average number of shares under option during year 100,000 shares
The exercise price for shares under option during the year $15.00
Required
Calculate both basic and diluted earnings per share.237 $98 loss
Date Rate $ € Gain/ (loss)
1/11 1.63 30,675 50,000
1/12 1.61 (15,528) (25,000) (191)
31/12 1.64 15,244 25,000 93
(98)lossI didn’t understand anything with this answer which was given in the book
is that a answer?
because equipment is purchased in 2005 and in 2007 it was depreciated and although it was a 6 years useful life we depreciate 12million amount over the 4 year and depreciated expense will be 3 . and at the end of 31 dec 2009 ac dep will be 9. and 12-9=3 million should be remain at the end. Bingo?? 🙂
Sir I have another question about consolidated PL statement
The following information relates to Brodick Co and its subsidiary Lamlash Co for the year to 30 April 20X7.
Brodick Co Lamlash Co
$’000 $’000
Sales revenue 1,100 500
Cost of sales (630) (300)
Gross profit 470 200
Administrative expenses (105) (150)
Dividend from Lamlash Co 24 –
Profit before tax 389 50
Income tax expense (65) (10)
Profit for the year 324 40
Brodick Co Lamlash Co
$’000 $’000
Note
Dividends paid 200 30
Profit retained 124 10
Retained earnings brought forward 460 48
Retained earnings carried forward 584 58
Additional information
(a) The issued share capital of the group was as follows.
Brodick Co: 5,000,000 ordinary shares of $1 each
Lamlash Co: 1,000,000 ordinary shares of $1 each
(b) Brodick Co purchased 80% of the issued share capital of Lamlash Co on 1 November 20X6. At that
time, the retained earnings of Lamlash stood at $52,000.
Required
Insofar as the information permits, prepare the Brodick group consolidated statement of profit or loss for
the year to 30 April 20X7, and extracts from the statement of changes in equity showing group retained
earnings and the non-controlling interest.First we know that we calculate and added 6 monthly .taking into account this fact why we didnt add 6 monthly remaning profit when calculating Added on acquisition of subsidiary?
They only calculated like thatAdded on acquisition of subsidiary
Share capital 1000k
RE 52k
and 40% of this which is clear.
why they didnt add 6 monthly profit remaning profit which based on from 1May 2006 to 30 Oct?in this an answer?
because Subsidiary owns 10000$ and parent owns to subsidiary 8000 as a result after cancellation it remains 2000 and cash in transit is deducted from this amount . therefore it remains 0I have another question which you explained yesterday but in this example I assume that they made mistake.
The draft statements of financial position of Ping Co and Pong Co on 30 June 20X8 were as follows.
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 20X8
Ping Co Pong Co
$ $
Assets
Non-current assets
Property, plant and equipment 50,000 40,000
20,000 ordinary shares in Pong Co at cost 30,000
80,000
Current assets
Inventory 3,000 8,000
Owed by Ping Co 10,000
Receivables 16,000 7,000
Cash 2,000 –
21,000 25,000
Total assets 101,000 65,000
Equity and liabilities
Equity
Ordinary shares of $1 each 45,000 25,000
Revaluation surplus 12,000 5,000
Retained earnings 26,000 28,000
83,000 58,000
Current liabilities
Owed to Pong Co 8,000 –
Trade payables 10,000 7,000
18,000 7,000
Total equity and liabilities 101,000 65,000
Ping Co acquired its investment in Pong Co on 1 July 20X7 when the retained earnings of Pong Co stood
at $6,000. The agreed consideration was $30,000 cash and a further $10,000 on 1 July 20X9. Ping Co’s
cost of capital is 7%. Pong Co has an internally-developed brand name – ‘Pongo’ – which was valued at
$5,000 at the date of acquisition. There have been no changes in the share capital or revaluation surplus of
Pong Co since that date. At 30 June 20X8 Pong Co had invoiced Ping Co for goods to the value of $2,000
and Ping Co had sent payment in full but this had not been received by Pong Co.
There is no impairment of goodwill. It is group policy to value NCI at full fair value. At the acquisition date
the NCI was valued at $9,000.
Required
Prepare the consolidated statement of financial position of Ping Co as at 30 June 20X8.they record this amount 2000 cash in transit . and added to cash but not deducted from the AR . why?
Aaaaa that is clear?? 40% we owned and the reamining portion is still our liability. Perfect.
Thanks a lot.
And cash in transit is also deducted from AR and added cash simultaneously?
And inventory in transit double entry always like that : DR Inventory CR COScash is transit is deducted both from cash an d receivables right? Yeah it is only goods in transit
goods in transit is shown in this example under the current asset like this
Goods in transit(18000-12000)=6000
but we know that goods in transit’s double entry Dr Inventories Cr Account payable
According second question I dont still understand that if we own 40% of the loan stock why we added 60% to the consolidated FS. how can we behave with the strange fiqure in our consolidated statement
I have another question about cash in transit.
why in this example cash in transit added to cash in consolidated FS but wouldn’t be deducted from the receivables. why? because double entry is that Dr cash Cr receivables
all of the things you have mentioned I understood. But only the things that I cant understand that why we dont calculate 6 monthly depreciation for the assets from the date 1 Oct 2008 to 1 Apr 2009 . others are clear
why you calculate whole year of depreciation 150×20%
because year begins 1 October and ended 30 sep
and we first calculate 6 monthly 150*20%*6/12=15 and plus
after the 1 aprel 50*20%*6/12=5 and total 20entry for this transaction would be or not??
Dr Loss on impairment 50m
Cr Accumulated Impairment Loss 50mthen we reversed
Dr Accumulated impairment Loss 10m
Cr Gain on Reversal 10mit means that it shouldnt be recognised as intangibles assets and therefore impairment and revaluation shouldnt be occured logically it is true? right? 🙂
Stauffer owns a 30-year patent which it acquired two years ago for $8m which is being amortised over its remaining useful life of 16 years from acquisition. The product sold is performing much better than expected. Stauffer’s valuation consultants have valued its current market price at $14m..
in this example we know active market price according the question 1 but it was written that there is no active market for patentin which the participatory budget is not effective?
in the period of Economic affluence
in centralized organizations
in large organizationsAnother question when EOQ is accepted.
Annual price and annual ordering decreases , annual holding cost also decreases?I agree with you. Bu its given in the BPP book as a direct expense cost but I don’t know why
We know that the main objective of EOQ is to minimize the inventory cost. therefore, if EOQ is acceptable , prices will decrease, annual ordering will decrease, annual holding will increase, is that right?
Sir, I have also one more question, if ordering cost decrease, EOQ will also decrease and therefore annual holding cost decreases. but in formula of EOQ , we know that EOQ and ordering costs are directly proportional , therefore when order decreases , EOQ also decreases. but why annual holding also decreases? annual holding is inversely proportional with EOQ
