- This topic has 2 replies, 2 voices, and was last updated 3 years ago by
.
- Posts
Hi…
I need help…
Immediately after acquisition of S co on 1 Oct 20×0, 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 $200i 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
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:1.000and excess depreciation:
Debit NCA :200
Credit : Cost of goods : 200
1.000-200=800
- You must be logged in to reply to this topic.