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Hi My tutor, i solved the question Penketh, Sphere and ventor and i successfully completed it but question is that if associate pays dividend and how i will gonna give its debit credit in Consolidated financial statement
Unrealised profit of Pco in associate will be
debit Gre
credit investmentShare of profit after tax of Pci In associate
debit investment
credit GREif associate pays dividend the double entry will be
debit cash
credit investment in Consolidated financial statementis this cash will go to under current asset?
I think found it, if dividend is paid by Associate I have to approach it like dividend receivable from Associate and i add it over GRE working then record it as receivable under current asset
debit dividend receivable
credit GReBut in the case of investment , i have to deduct it from investment
did I get it right?
the only case here i have to pay attention if its declared before end of reporting date or after end of reporting date it is like that
Before end of reporting period
Retained earning in associate-20000
dividend payable-5000
15 000*30%=4500
5000*30%=1500INvestment–10000(let us assume )
4500dividend receivable-1500
retained earnings-1500+4500
After end of reporting period
Retained earning in associate 20000
dividend pay -500020000*30%=6000
5000*30%=1500
Investment-10000
6000
(1500)dividend receivable-1500
GRE-6000(dividend alraed here)
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