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A co acquired a 60% holding in B limited on 1 July 20×6. At this date, A gave B a $500,000 8% loan. The interest on the loan has been accounted for correctly in the individual financial statements. The following totals for finance costs for the year to 31 december 20×6 in the individual financial statements are shown below.
A co $200,000
B CO $70,000WHAT are consolidated finance costs for the year to 31st december 20×6?
A)$ 215000
B)$ 225000
C) $230000
D) $250000$500000*8%*6/12 = $20000
at the back of the kit the answer is B) $225000
Can you tell how they got that answer as I am not getting itNor, nor am I!
I think that the interest on the loan for 6 months at 8% is:
$500,000 x 8% x 6/12 = $20,000
That $20,000 is an intra-group transaction and mirrored by A Limited as loan interest received
The received amount of $20,000 is cancelled against the $20,000 included within B Ltd’s finance costs leaving B Ltd finance costs at $50,000 (70 – 20) and an aggregate consolidated finance cost of $200,000 + $50,000 = $250,000 = option D
Hi mike,
Pass paper March/June 2016 Q1 can you work the retained earnings calculation for me please.
I try by subtracting the preq 8600 from negative 3000 getting 5600 to start outmedda 5600
loss (200)
dep 500
appp losses (1500)
plant (2500)
tax asset ( 1200)
can you help me pleaseWhat’s the matter with working (ii) from the suggested solution on page 11 of the answer sheet?
Here’s a link:
‘https://www.accaglobal.com/content/dam/ACCA_Global/Students/fun/f7/j16_hybrid_F7_q.pdf.pdf’
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