December 2014 exam consolidation qn on Plastik

At the year end retained earnings are $3,500. That's after adding on this year's retained earnings of $2,000 So brought forward from last year must have been $1,500 The acquisition took place 3 months in to this year so 3/12 of this year's profits were pre-acquisition = $500 Total pre-acquisition was therefore $1,500 + $500 = $2,000 OK?

Yes got it. Thanks alot.

For transaction (iv), to eliminate the interco balances. Shouldn't we take 1200 - 400= 800 DR trade payables 800 CR trade receivables 800 But in the suggested answer i realise they only minus 800 from trade payables. They didnt minus 800 from trade receivables. Why is this so ?

The answer deducts 1,200, 800 of which is cancelled against trade payables and the remaining 400 is deducted from Plastik's overdraft Let me ask you this ..... have you watched the lectures that cover accounting for in-transit items?

Nope i didnt.

Why on Earth not? The lectures are there to explain the course notes and the course notes are there to give you a solid basis for attempting the F7 exam! There's still time to watch the videos - I strongly recommend it

I just watched it. It really helps. Thank you so much. As for the consolidated SOFP , for share premium it is given as 4800 ×$2 = 9600 Where did the $2 come from ? Is it P's share price $3 - par $1 = $2

"Where did the $2 come from ? Is it P’s share price $3 – par $1 = $2" - yes, and that's all explained by John in the F3 video lectures!