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Hi Mike,
In the SoFP, it says that investment in Savannah and Axle is $13,250. However, cost of investment for Savannah is $12,750 and for Axle is $9000. Can you explain to me why the investement figure is not 12750+9000 please?
Thank you
What about this line from the question?
“Only the cash consideration of the above investments has been recorded by Plateau”
Cash consideration for Savannah = $3,750 and for Axle =$9,000. It still doesn’t add up to the $13,250. There is a professional cost of $500 relating to the acquisition of Savannah, is this what makes it to the $13,250 figure?
According to the version of the question paper that I have in front of me, it says:
“Investments in Savannah and Axle 12,000”
I don’t understand your post!
I used the question from the BPP exam kit, which is similar to the one in this exam kit pg43 :
Sorry to respond on an ask the tutor but it does state in the question…..
(1500×6)+(1.25×3000) = $12,750Only the cash consideration of the above investments has been recorded by plateau. In addition $500,000 of professional costs relating to the acquisition of Savannah are also included in the cost of investment.
Hope this helps.
Correction:-
Savannah (1.25×3000)+ Axle (30%x4000x7.50) =$12,750 + £500 = $13,250Dumonde, you’re forgiven and your input is appreciated (on this occasion! )
I don’t have the BPP book
However …. when I put into Google search “Plateau F7” the second (?) entry has the official question as set by the ACCA
I am unable to answer for BPP’s version
I’m really sorry 🙁
This is what you posted on 16 May at 1.33 pm:
“There is a professional cost of $500 relating to the acquisition of Savannah, is this what makes it to the $13,250 figure?”
This is an extract from the question from the link you gave me
“In addition $500,000 of professional costs relating to the acquisition of Savannah are also included in the cost of the investment.”
How much clearer can this be?
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