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415 plank Kaplan question

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › 415 plank Kaplan question

  • This topic has 3 replies, 2 voices, and was last updated 11 months ago by P2-D2.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • March 3, 2022 at 8:17 pm #649770
    kk-@
    Member
    • Topics: 2
    • Replies: 7
    • ☆

    Hello
    In this question profit for the year of subsidiary = 66000
    Parent acquired subsudiary in mid year
    At same time it invested in some loan of subsidiary
    The interest on the loan for 6 months = 5000

    So my question is , how to calculate post acquisition profit ?
    In answer they calculated like this : 66000*6/12 = 33000

    But I think post acquisition profit should be calculated like this
    (66000+5000)*6/12 – 5000 = 30500

    Help me please

    March 5, 2022 at 10:54 am #649878
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6460
    • ☆☆☆☆☆

    Hi,

    Why would you adjust for the interest on the loan prior to pro-rating the profits?

    Thanks

    March 5, 2022 at 3:40 pm #649915
    kk-@
    Member
    • Topics: 2
    • Replies: 7
    • ☆

    I want to find the post acquisition profit , so that we can distribute it between parent and nci ,now I just want to know post acquisition profit should be 33000 or 30500?

    March 8, 2022 at 9:31 am #650205
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6460
    • ☆☆☆☆☆

    Hi,

    It is the 33,000 being 6/12 of the profit for the year.

    Thanks

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    Posts
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