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For PANDAR December 2009,
For Transaction (ii) and (iii),
How do i go about doing these transactions? I have never came across intercompany loan notes and interco dividends. What will the adjustments be ?
Here’s the link where I work through the entire question Pandar in the video
If you still have a problem after you’ve watched the video, by all means come back to me
https://opentuition.com/acca/f7/acca-f7-december-2009-question-1-pandar/
Okay thanks. Salva is providing the loan to Pandar, therefore Salva has to pay interest to Pandar right ?
“Salva is providing the loan to Pandar”
I’m struggling yet again with your expressions
What do you mean “providing the loan”?
Let’s put it simply … here’s the extract from the question
“Immediately after its acquisition of Salva, Pandar invested $50 million in an 8% loan note from Salva.”
Now, who is providing the loan to whom?
Please tell me …. because I simply cannot work out what goes through your mind when you write “Salva is providing the loan to Pandar”
PANDAR DECEMBER 2009,
For the post acq reserves of Salva, why we don’t have to include the Retained earnings ? In the video, for the post acq reserves of Salva, you just took 9500 -500 =9000 . Why you didn’t include the retained earnings at post acq ?
9,500 is the post acquisition share of 21,000
Does that answer it for you?
Yes. Okay for the finance cost calculation it is given as.
Pandar 1800
Salva post acquisition ((3000-2000)×6/12+2000) 2500
Intragroup interest (2000)
Total finance cost 2300I dont understand the second line, that says “Salva post acquisition”.
Why we must minus 2000 from 3000? We added 2000 because of the interest on the loan note in the second half of the year right?salva finance cost per question 3,000
But 2,000 of that is intra-group
So oly 1,000 is “normal
Time apportion that 1,000 = 500 pre-acquisition and 500 post acquisition
Pandar’s own finance costs 1.800
Therefore finance costs for the consolidation 1,800 (P) and 500 (S)
So the answer key is wrong ? The consolidated finance cost given is 2300.
But if i take 1800 +500 – 2000intragroup interest = 300
In the answer key, it is stated as
Salva post acquisition ((3000-2000)×6/12+2000)= 2500
Why did they minus 2000 intragroup interest and then add back 2000 ??
Oh gosh. I actually already got the correct answer. Sorry . Ignore the last thread.
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