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Question on Moston. For transaction (i) on revenue
It is not stated when moston will buy back the goods. Then how come in the answer key they calculated the interest 10% based on 1 year ?
For transaction (iii) on NCA , its states that Moston’s property is carried at fair value which at 30 june 2015 was $29m.
So does it mean the property was revalued at 30 june 2015 to $29m. Because there is a rev.gain in the answer key?
As for qn3 transaction (iv)
For the interco balances, the adj i made on the SOFP are
+ 800 to inventory
– 800 from payables
– 2400 from trade receivables
– 2400 from trade payablesbut the answer i got for the other current liabilities is 40 700 . I took 25800 + ( 18100 – 2400 intragroup -800GIT) = 40700
In the answer key, the answer is 42300. They took 25800 + 18100 – ( 2400 intragroup -800 GIT) = 42300.
Where did i go wrong ?
the calculated interest is on 6 months..since the sale is made on jan and year end is june ..so 3000*10%*6/12..
you will understand better this way
25800+18100+800-2400
we add 800 because the goods are in transit so the parent has accounted for in his receivable so we increase the payable by 800 too so that we can remove the intra group transaction of 2400..
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