[Igor]

It is a mid-year acqn. We should take only 6/12 (October-March) of Ripsaw Profit for the year (note iii) $7,500*6/12 = $ 3,750

[Igor]

Many thanks

[Igor]

I just meant that my mistake is more likely than ACCA’s one.

There is only one point relating to dividends:
” (iii) Pandar has credited the whole of the dividend it received from Salva to investment income. “

What we should do in such cases? Sould we write the correcting entry : Dr Investment Income Cr Investment in Salva(INCA) $3’200 (8000*80%*6/12) ?
Or we must just use given figures assuming that :
#1 Examiner always right.
#2 If Examiner wrong then look at the first paragraph

[Igor]

Ok, it reduces consolidated ret’d earning by whole amount of dividends in both cases but preacqn dividends must effect on goodwill. But in answer only investments at cost are appeared in the Goodwill calculation.

I just need to know who is wrong me or ACCA (where am I wrong- would probably be more correctly)

P.S. This in a question from ACCA site
Question

Answer

[Igor]

Sorry, vise versa (I reverced 2005 and 2006)

Rental income
Dr

---

Cr

---

________________________ Bal. b/d 12 300
Income 305 700 ___________ Payment 280 000
________________________Bal c/d 13 400

---

_______305 700________________305 700
Bal b/d 13 400

[Igor]

I don’t understend where is a problem?
Rental income
Dr

---

Cr

---

Bal. b/d 13 400
Income 254 300 ________ Payment 280 000
Bal c/d 12 300

---

_______280 000________________280 000

________________________ Bal b/d 12 300

You have a question about ” Bal c/d 12 300″ ?

[Igor]

Ok, If nobody wants to answer let’s discuss my version.
Firstly we have to do some working:

w1 Old Plant (Asume that we use straight line method for depreciation)
Cost of old plant = Cost of acqn(800) + disposal cost
Cost of old plant – depreciation = NBV(200) =>
(800+disp.cost) – (800+disp. cost)/5(EUL)*4 years = 200 =>
disposal cost = 200 => Cost of old plant = 800+200=1,000

w2 Depreciation
Dep’n of new plant =(2,000-200-2,000*25%(grant))/5= 280 per year but it was acquired on 1.01.11 thus this year dep’n = 280/12*3=70

So,
PPE = 14,800-1000(w1)+2,000(new plant)-2,000*25%(grant)=15,400
Acc. Dep. = 3,600+200(dep’n of an old plant)-1,000(disposal of an old plant)+70(w2)=(2,870)
NCL=3,000-1,000(to CL)+400(new grant)=2,400
CL=240-240(payed)+1,000=1,000

These are my thoughts, I’m waiting for your corrections

p.s. I don’t understend how to use : “The government requires the balance of unamortised gov. grant receives on this plant to be refunded immediately.”

[Author]

Posts