June 2014 consolidation qn on Penketh

You appear to have missed the increase from zero to $5 million for the intangible asset Adjustment: + 5,000 to INCA Otherwise it's ok

So for the last one the amortisation of intangible . There are 3 adjustments required right ? Adjustments : +500 to admin exp -500 from PPE +5000 to intangibles

Its stated in the answer key that the post acquistion reserve is 80000. The answer i got for total of post acquisition reserves is 38500. The post acq retained earnings i got was $40000 . Therefore i took the post acq RE 40000 + FV adj dep(1500) = 38 500.

"So for the last one the amortisation of intangible . There are 3 adjustments required right ? Adjustments : +500 to admin exp -500 from PPE +5000 to intangibles" - debit intangibles, credit (fair valued assets at date of acquisition) reserves I always (lazily) put that credit into retained earnings. Technically it should be to Revaluation Reserve

Where does it say 80,000? At the top of working (ii) it says "Sphere's post acquisition profit (80,000 x 6/12) 40,000 That is then adjusted for the 1,500 additional depreciation on the fair value adjustment and for the 500 amortisation (that you have missed off) Why do you think the answer key says 80,000 post-acquisition?

Sorry i guess I misinterpreted the figures. As for transaction (ii) on revaluation. These are my adjustments - revaluation of 1000 Adjustments: +1000 to PPE +1000 to Other comprehensive income + ( 60%× 1000) = 600 to revaluation surplus in SOFP. Are my adjustments correct ? The value i got for the consolidated SOPL other comprehensive income , for Gain / loss on revaluation is 1800 I took (2200) + 3000 +1000 = 1800 But the answer key shows 1200.In the answer key these are the workings. (2200 -( 3000- 2000) gain for sphere) Why is this so ?? Why did they minus the values and why did they minus 2000 instead of adding 1000 ?

For transaction (iii) , In the suggested answers for investment income : other Why in the suggested answers a dividend of 1800 is minus from 5000 for Penketh. The dividend by the associate is 6000. And furthermore, i thought it should be added to Penketh's investment income in the individual statement right. But why they minus 1800 from 5000.

Anuja, have I asked you this before .... have you watched the lectures on this? All of this is covered in the lectures and it seems silly to keep asking me where you could sort out the problems for yourself!

"+ ( 60%× 1000) = 600 to revaluation surplus in SOFP." - why 60% - since when have we started dealing in percentages - it's a full $1,000 gain that goes into comprehensive income "Why is this so ?? Why did they minus the values and why did they minus 2000 instead of adding 1000 " - (2,200) was the loss for Penketh 2,000 was the fair value adjustment as at date of acquisition 1,000 is the gain since acquisition Overall gain for Sphere on the land is 3,000 but 2,000 of that is dealt with in the goodwill calculation S only (3,000 - 2,000) is now being considered. And it's a gain so it's set off against the 2,200 loss in Penketh's land values OK?

"Why in the suggested answers a dividend of 1800 is minus from 5000 for Penketh" - it's the Penketh share of the dividend from the associate company and, as such, it's not included within the retained earnings figure. That's why it's deducted - because it was included within Penketh's investment income "The dividend by the associate is 6000." - and Penketh's share of that is 30% ie $1,800 and we're told that "during March 2014 Ventor paid a dividend of $6 million." so that $1,800 must have been received and recorded and included within the $5,000 Penketh investment income "And furthermore, i thought it should be added to Penketh’s investment income in the individual statement right" - because it has already been included, we now need to deduct it because, instead, we are going to bring into consolidated retained earnings our share 30% of the Ventor profit after tax and it's out of that profit after tax that Ventor has deducted the $6,000 dividend "But why they minus 1800 from 5000." - just explained that

Because in december 2014 paper, for the revaluation surplus under SOFP, they multiplied the P's % x revaluation .

Is there lectures regarding the answers to past year acca exams ?

You could try this link! https://opentuition.com/acca/f7/acca-f7-revision-kit/

"Because in december 2014 paper, for the revaluation surplus under SOFP, they multiplied the P’s % x revaluation ." - the gain on the revaluation goes in full to the asset The credit entry goes to Revaluation Reserve But if you look at page 42 of the free course notes (or if you watch the video lecture that covers chapter 7) you'll find the answer there! OK?