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sir could you help with this one please i dont understand:
Section B Question 2:
NCI 10%=10000 at acquisition
P’s share is 90%=$85000 at acquisition
Retained earnings of Parent 189000
Retained earnings of 2 years=$72000
Pre-acquisition earnings $12000
what is the retained earning of the group?
I did like:
189000+60000*90%=243000
what is the problem here?:(when we have inventory left while having situation of inter-group trading we should:
1)subtract Unreal profit from sales of both (P and S)
2)include into inventory of the side that holds inventory, right?
3) reduce the profit by this amount of NCI’s and Parent’s.
right sir?In the Consolidated statement of profit or loss:
1. You subtract all inter-group sales from total sales and from total purchases.
2. You increase the total purchases by the unrealised profit in the remaining inventory
In the Consolidated Statement of financial position:
1. You subtract the unrealised profit from the total inventory
2. When calculated the total retained earnings and the NCI you subtract the PURP from the retained earning of whichever of the two companies that originally sold to the other.
(You make no changes to the statements of the individual companies)
sofp:
2) so when P sells to S then there’s no effect on NCI’s share, right?
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