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P acquired 70% of S.
SOFP
Current Liabilities: P. S
Payables. $9000. $2460
Dividend. $20000. $10000my calculation was
CSFP:
Payables(9000+2460)=11,460
Dividend(20,000+10,000)=30,000
as the total assets and liability should be stated in Group.but the solution was
CSFP:
Payables(9000+2460)=11,460
Dividend[(20,000+(10,000X30%)]=23,000
Please explain sir!It is because in the consolidated accounts you only show dividends payable outside the group (so not dividends paid from one company to the other)
thanks moffat sir!!
70% of the sub’s divident going to received by the parent and 30% by the others that’s why we are showing only the outside liability here!
am I correct sir!P co. acquired 80% of the equity share capital of S co. several yrs ago.In the yr to 31 dec 20X4, P co made a profit after tax of $120,000 and S co. made $35,000.
during the yr S co. sold goods to P co. at a price of $40,000.The profit mark-up was 40% on the sales price.At dec 20X4, 25% of these goods were still held in the inventory of P co.
what profit is attributable to the parents company in the CSOPL of the P group for the yr 31 dec 20X4?the only problem I face here is to calculate the PURP:
is that means a mark-up of 40% over the $40,000?
so here,140%?40,000??
please explain sir!Usually mark-up is a % of cost, but if this question actually says the profit is a markup of 40% of sales price, then the profit is 40% of 40,000 = 16,000. Since 25% of the goods were still in inventory the PURP is 25% x 40,000 = 10,000
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