- This topic has 8 replies, 2 voices, and was last updated 5 years ago by
.
- Posts
Dear Mr. John
1. Cost plus equal to Mark up
Therefore: Goods sold org costing 12mil and invoiced cost plus 40% but still has 30% inventory Ans is = 12*40%30%=1.44 , why not 12*40/140*30%
2.If in the question parents share is not given , what % should we consider to calculate NCI?
3.If in the question ask for show Goodwill and R/E , do we still need to show SOFP with adding value of Goodwill and R/E?Regards,
Victor1. If the cost is 12m then the profit is 40% x 12m. If 30% remain in inventory then the provision for unrealised profit is 40% x 12m x 30%
2. You will either be told the % or you will be told how many shares the parent holds in which case you can calculate the % yourself since you will know the number of shares in the subsidiary.
3. You will not be asked to produce a full SOFP, only the items that the question asks for.
Dear Mr. John
As per your reply No1- based on your lecture exp -7 : During December 2010 s had sold goods to p $ 6000. S sells to P at cost plus 25%. =6000*25/125
1. but as per your answer above the question says : Black sold goods which originally cost $ 12 mil to bury . Blacked invoiced bury at cost plus 40%. Bury still has 30% of these goods in inventory but answer is 12mil*40%*30% why not 12mil*40/140=3.42*30% , why does not apply same formula as per your lecture?
2. In this question says : Black -Parent =ordinary share 100000 Bury -Subsi = 30000 how to figure-out the % of Parents share? what is the calculation?
Need your help
Regards,
Victor1. In the lecture example, $6,000 is the price at which S sold the goods to P.
In your example in your first post, $12M was the original cost of the goods, the price at which they were sold to the subsidiary was 40% higher.2. The figures you have typed are impossible. If the subsidiary has 30,000 shares then the parent cannot possibly own more than 30,000 shares!! (Maybe the 100,000 is the amount they paid for the shares rather than the number of shares they own, but I do not know without seeing the question).
I have the hard copy of the Revision Kit, so all I needed was the number of the question.
On Blacks SOFP it says that they own 21,000,000 shares in Bury.
On Bury’s SOFP the share capital is 30,000,000 shares.
Therefore Black owns 21M/30M = 70% of the shares.
- The topic ‘SOFP Topic’ is closed to new replies.