[Steve]

is cash discount the only discount included in the discount allowed/received?

and in sales and returns its trade discount only?

thanks

[Steve]

again im being stupid thanks again!!

[Steve]

omg im being really stupid thanks again!

[Steve]

but included in the 2145 is a prepayment for rent for april and may 20Y0 dont we do something to deduct this?

[Steve]

let me answer each one the way i thought maybe you can see the way im looking at it.

A) This should have been entered on the debit side but was entered on the credit side so credit side overcast

B)This error would increase the debit side of the controll account by 12780 too much and therefore reduce the credit side so this is not correct

C) This error would mean the ledger is higher than the control account

D) This would increase the control account on the credit side

[Steve]

i still dont understand sorry. If there is 12780 too much on the Debit side of this accounr wouldnt that reduce the credit balance. Wouldnt it be 12760 less than the ledger?

thanks

[Steve]

sorry the payables ledger is 781200

[Steve]

ohh of course. thanks again!

[Steve]

thanks again you are correct and i am watching all your lectures!.
i can answer (a) now but i cant seem to get the correct figures for both (b) and (c) 🙁

[Steve]

thankyou!

do you have any lectures on incomplete records?

[Steve]

in all the questions in both books and opentuition there are no dividends paid between intra group or outsiders. is this beyond f3? how would you deal with these if P or S are paying/receiving dividends?

thanks again!

[Steve]

actually you do say in one of the lectures that it gets deducted from P’s retained profits instead..

however in my textbook they have deducted the purp from S’s “post” retained profits and not P which probably has the same effect in the consolidated retained earnigns but in the calculation of NCI this will give a different answer!!!!????????

[Steve]

i am watching the lectures but none of the examples in inter-entity sofp show what happens when P sells to S.

i understand that when S sells to P, the purp is deducted in the NCI calculation of S. But when S sells to P the purp figure is not used at all here.

in the group retained earnings, when S sells to P the purp is deducted from the post acquisition profits of S.. what happens when P sells to S is the purp deducted from P’s retained earnings and not S??

[Steve]

and finally the mid year acquisition i.e. reporting date retained earnings of S minus post acquisition profits of S to arrive at a balancing figure of pre acquisition retained earnings which is used for the calculation of group retained earnings and NCI.. what else in the SOFP and SOPOL does this effect? And what are the differences if P sold to S or vice versa in this?

[Steve]

thankyou very much!

[Steve]

in the consolidated SOFP:

if the parent sells to the subsidiary then the purp is deducted from the group retained earnings only
if the subsidiary is the seller the purp is deducted from the reporting date net assets of S only which is used to calculate retained earnings and NCI?

the deduction of purp from inventory procedure remains the same

the deduction of inter entity payables/receivables/current accounts from both group receivables and payables/current liabilities procedure is the same

the calculation of goodwill is the same only variation is if there is a fair value adjustment

?

thanks

[Steve]

you are correct i misread the figures i thought it was 3200 not 32000.

thanks again & i will copy and paste

[Steve]

last one and ill make a new topic…

Apple has her own business selling dolls to stores_ At 30 June 2013 she has a balance on her trade receivables of 62,900_
A balance of $2,000 due from X Co is considered irrecoverable and is to be written off_ Y Co was in financial difficulty and Apple wishes to provide an allowance for 60% of their balance of $1,600.
She has also decided to make a general allowance for receivables of 10% of her remaining trade receivable&
What is the allowance for receivables in her Statement of financial position at 30 June 2013?

the answer is 6890 and i cant get this figure.

my calculations are 62,900 -2000 -(60%*1600) then times answer by 10% getting
5994

add back irrecoverable debt 2000 and specific allowance (60%*1600) and i get 8954 as my final answer

[Steve]

i didnt realise it wasnt in the ask the tutor bit sorry for this

[Steve]

the depreciation is written 8.2million thats where i went wrong so there is a misprint?

i also didnt even see the revaluation wow..

i think i need to watch the cash flows and inter-entity lectures again

thanks

[Steve]

similarly the Alice bought 90% of the equity share capital of Bertha two years ago on 1 July 2012, when the retained earnings of Bertha stood at $12,000_
Attached are the Statements of financial position of both Alice and Bertha at 30 June 2014 (click on the statement to enlarge)
During the year Alice had transferred goods to Bertha for $45,000 – this figure includes a mark-up of 50%. Two thirds of these goods remained in inventory at the year end_ The balance on the current account between Alice and Bertha was $53,000 at the year end.
The fair value of the non-controlling interest at the date of acquisition was $10,000.
You are required to prepare a Consolidated statement of financial position.

required to calculate the NCI..

i am not sure why they have not deducted the purp from remaining inventory??

[Steve]

thanks again and i do watch your lectures!

[Steve]

it says that the impress was restored by this amount $210 i think im assuming that they did it correct but the actual answer is that it was posted as 200 to the petty cash debit side

[Steve]

your firstly bit is what i thought but your secondly im not sure why its deducted again because it says it was included in closing inventory instead of expenses not both.. sorry for hassling you 🙂

[Steve]

thankyou but why is the petty cash book credited with the reimbursement? i thought its an asset account so debit = money in.

[Author]

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