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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
Classifying expenses by nature Under this format, expenses are not classified by their nature i.e. referred to specifically according to their type and the major categories of ex
1. The acceptance of a capital budgeting project is usually evaluated on its own merits. That is, capital budgeting decisions are treated separately from capital structure decision
what is the explanation?
Harry purchased equipment for his business and gave the seller cash and a note due in two years. Larry also purchased business equipment, but financed the transaction with a bank l
On 1 January 2008, a young artist called Michelangelo signed a contract with a charity named Art Angels, which supports young artists to do large projects. The agreement requires M
ACC2200 Financial Accounting Assignment Trimester 2, 2013 DUE DATE: Monday, 9th September 2013 VALUE: 15% of OVERALL ASSESSMENT REQUIRED: (1) This research question consists of a
1. Would export businesses prefer a rising or declining dollar? Would it be the same for a European tourist on a budget and visiting the Grand Canyon? Explain your answer. 2. Wh
Q. A ltd. Company has equity share capital of Rs. 5,00,000 divided into shares of Rs. 100 each. It wishes to gain further Rs. 3,00,000 for expansion cum modernization plans. The co
profit and loss account
The current market price of a Leigh bond is $1,297.6. If the coupon rate is 10% and the par value is equal to $1,000, what is the yield to maturity of the bond if it matures in 10
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