RETAINED PROFITS BROUGHT FORWARD-group accounts, Financial Accounting

Assignment Help:

RETAINED PROFITS BROUGHT FORWARD

If 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

 

 

x

Less : Unraelised profit on opening inventory if holding company had made the sale

x

 

          Goodwill impaired to date (up to the start of the yaer)

x

 

         Unrealised profit on sale of PPE in previous years if holding co. made the sale

x

(x)

Holding companies retained profit b/f  adjusted for conslidation

 

x

 

The subsidiaries profits brought forward will be adjusted as follows before the holding company takes its share:

 

£

£

Subsidiary companies retained profit brought forward

 

X

Add: Excess depreciation charged by subsidiary company up to start of the year

 

X

 

 

x

Less : Unraelised profit on opening inventory if subsidiary company had made the sale

x

 

          Depreciation on Fair value adjustment that should have been charged to date

x

 

         Unrealised profit on sale of PPE in previous years if holding co. made the sale

x

(x)

Subsidiary company’s retained profit b/f

 

x

 


Related Discussions:- RETAINED PROFITS BROUGHT FORWARD-group accounts

Required: prepare journal entries for the above transactions, Sleek Ride, a...

Sleek Ride, a company providing limo services, has a December 31 year-end date. For Sleek Ride, the following transactions occurred during the ?rst 10 days of June: a. Purchased, o

Calculate the cash flow-agency costs, Tom Scott is the owner, president, an...

Tom Scott is the owner, president, and primary salesperson for Scott Manufacturing. Because of this, the company's profits are driven by the amount of work Tom does. If he works 40

implied exchange rate between usd and gbp , You have been provided with th...

You have been provided with the following information on a fixed-fixed USD-GBP currency swap, the spot exchange rate between USD and GBP, and the USD and GBP yield curves: Fi

Evaluate value of rights per existing share, Q. Evaluate Value of rights pe...

Q. Evaluate Value of rights per existing share? Rights issue price = 4·00 × 0·85 = $3·40 Theoretical ex rights price = ((5 × 4·00) + 3·40)/6 = $3·90 Value of rights per e

What is leveraged lease, Q. What is Leveraged Lease? Leveraged Lease - ...

Q. What is Leveraged Lease? Leveraged Lease - Transaction under which LESSOR borrows funds to acquire property which is leased to a third party. Property and lease rentals are

our assumptions about consumer behavior, 5.    A stockholder named Sue mus...

5.    A stockholder named Sue must cast a vote for chair of the board. Sue prefers Mr. Lee to Ms. Doe, Ms. Doe to Mr. James, and Mr. James to Mr. Lee. a. Are Sue's preferences c

Activity-based costing (abc), Activity-Based Costing (ABC) An accounti...

Activity-Based Costing (ABC) An accounting method that assigns identifiable costs and allocates common costs to definite product lines or business fragments Also known as pro

Determine arbitrage-free rate of interest, The government of a country has ...

The government of a country has just issued a series of zero-coupon bonds maturing at the end of years 1, 2, 3 and 4. Suppose the spot rates (or continuously compounded yields per

Modern techniques economic order quantity, The economic demand quantity can...

The economic demand quantity can also be found out with the assist of a graph. In this technique ordering cost, carrying cost and total inventory costs as per various lot sizes are

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd