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RETAINED PROFITS BROUGHT FORWARDIf we recall from the consolidated balance sheet, the group-retained profits should be made up of the holding companies retained profit plus the holding companie’s share of subsidiary companies post acquisition retained profits. The same case applies to computing the retained profits brought forward of the group. The group-retained profits brought forward should be made up of the holding companies retained profit brought forward plus the holding companie’s share of subsidiary companies post acquisition retained profits brought forward.But we have to make adjustments to the holding companies retained profits brought forward and the subsiairy company’s profits before we get the holding companies sher. The adjustments are for transactions that took place previously that affect the profits of these two companies.The holding companies retained profits brought forward will therefore be adjusted as follows:
£
Holding companies retained profit brought forward
X
Add: Excess depreciation charged by holding company up to start of the year
x
Less : Unraelised profit on opening inventory if holding company had made the sale
Goodwill impaired to date (up to the start of the yaer)
Unrealised profit on sale of PPE in previous years if holding co. made the sale
(x)
Holding companies retained profit b/f adjusted for conslidation
The subsidiaries profits brought forward will be adjusted as follows before the holding company takes its share:
Subsidiary companies retained profit brought forward
Add: Excess depreciation charged by subsidiary company up to start of the year
Less : Unraelised profit on opening inventory if subsidiary company had made the sale
Depreciation on Fair value adjustment that should have been charged to date
Subsidiary company’s retained profit b/f
Show the rectification entries for the following: (10 marks) a. The Sales account is undercast by Rs.15,000 b. Goods returned by
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“Ledger is said to be the principal book entry and the transactions can even be directly entered into the ledger account.” Elaborate and explain why journal is necessary.
Illustration for preparing final accounts K Ltd established a branch in Arusha Tanzania on 1.1.X2, when Kshs 1 = TShs 15. PPE costing Kshs 800,000 were purchased on that day. I
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Mr. Surya does not keep a systematic record of his transactions. He is able to give you the following information regarding his assets and liabilities. 2000 2001 Dec. 31 Dec. 3
#questioSavage Distribution markets CDs of the performing artist Little Sister. At the beginning of October, Savage had in beginning inventory 1,200 Sister’s CDs with a unit cost o
statement of the problem
Accounting policies Accounting policies are the specific assumptions, bases, principles and practices that are adopted by firms in preparing financial statements. The standard
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