1)Topic: accounting for Associates (group accounts)
Alfred Co bought a 25% shareholding on 31 Dec 20X8 in Grimbald Co at a cost of $38000. During the year to 31 Dec 20X9 Grimbald Co made a profit before tax of $82000 and the taxation charge on the year's profits was $32000. A dividend of $20000 was paid on 31 Dec out of these profits.
Calculate the entries for the associate which would appear in the consolidated accounts of the Alfred group, in accordance with the requirement of IAS 28.
2) Topic: Provisions
A company knows that when it ceases a certain operation in 5 years time it will have to pay environmental cleanup cost of $5m. The discount rate is 10%. What will be the provision amount for each of the 5 years? What will be total provision after 5 years?
Alfred Co bought a 25% shareholding on 31 Dec 20X8 in Grimbald Co at a cost of $38000. During the year to 31 Dec 20X9 Grimbald Co made a profit before tax of $82000 and the taxation charge on the year's profits was $32000. A dividend of $20000 was paid on 31 Dec out of these profits.
Calculate the entries for the associate which would appear in the consolidated accounts of the Alfred group, in accordance with the requirement of IAS 28.
2) Topic: Provisions
A company knows that when it ceases a certain operation in 5 years time it will have to pay environmental cleanup cost of $5m. The discount rate is 10%. What will be the provision amount for each of the 5 years? What will be total provision after 5 years?
