What adjustments would be necessary as a result of these

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Reference no: EM133502704

Question: Company A has two subsidiaries, S1 and S2, and two associates, AS1 and AS2. Company A has ownership interests in the subsidiaries and associates as follows: S1 100 Percent Owned S2 70 Percent Owned AS1 30 Percent Owned AS2 20 Percent Owned The following inter-entity transaction took place: AS1 sold goods to S1 at a profit of $20000. 60 percent of this profit is unrealised by the end of the year. AS1 sold goods to S2 at a profit of $20000. 60 percent of this profit is unrealised by the end of the year. AS1 sold goods to AS2 at a profit of $20000. 60 percent of this profit is unrealised by the end of the year. AS1 sold goods to Company A at a profit of $20000. 60 percent of this profit is unrealised by the end of the year.

Required: In determining the investor's share of the associates' profits, what adjustments would be necessary as a result of these transactions? (Consider each of these transactions as independent, and ignore taxes)

Reference no: EM133502704

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