Prodigal Co Bpp Consolidated SPL

Kkinza19974y ago

Hi... I need help... Immediately after acquisition of S co on 1 Oct 20x0, P co transferred an item of plant with carrying amount of $4 million to S co at an agreed value of $5 million. at this date, the plant had a remaining life of two and a half years. P Co had included the profit on this transfer as a reduction in its depreciation cost. all depreciation is charged through cos. i have difficulty understand the full adj i know that profit on transfer is $1000 excess depn is $200 i cannot understand why $800 is being added to cos? i am getting only $200. also, in NCI , why is it adding $200.. i thought it should be deducted plz help

TTa4y ago#1

P Co had included the profit on this transfer as a reduction in its depreciation cost, and all depreciation is charged through cos. Debit cost of Goods : 1.000 Credit NCA:1.000 and excess depreciation: Debit NCA :200 Credit : Cost of goods : 200 1.000-200=800

Kkinza19974y ago#2

hello thanks for the solution

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