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Dear sir,
In Sept/Dec 2019 Q (Digiwire)
In the calculation of profit on disposal of assets, they have taken only 50% of profit
Why?
Is it like similar to PURP in associate
Which means that total profit is $5m
But since it owns 50% of joint venture
So the profit will be 5m – (50%*5m)
ie 2.5m
Kindly tell if my logic is right
Thanks!Could you pls provide me with the journal entry with amt..would really appreciate
Perfect. Same logic as PURP for associate.
DR INVESTMENT 11.5
CR PPE 6
CR INT 3
CR P&L 2.5Remember NOT to write journals in the exam unless you are asked for adjustments.
Journals are NOT explanations.
🙂
Thank you…specially for journal entry( had just asked for clarity) ?
If i “explained” like this ?Investment in joint venture
Cost of investment $14m
(FV of consideration paid)
(-) PURP Share ($2.5m)
= Carrying amt $11.5m
It would be right too…right??But it would be better as a sentence. EG The JV investment can be calculated by deducting the unrealised profit from the fair value of the consideration paid.
But it would be better as a sentence. EG The JV investment can be calculated by deducting the unrealised profit from the fair value of the consideration paid.
But it would be better as a sentence. EG The JV investment can be calculated by deducting the unrealised profit from the fair value of the consideration paid.
Got it…Thanks a lot!
Really appreciate for your efforts to help all students
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