Ruth Ltd has a 30% investment in Abraham Ltd, which it had acquired four years ago on 1 July 2008. The cost of acquisition was $660 000. At that date all the assets and liabilities of Abraham Ltd was recorded at fair value. Ruth Ltd is a parent company. In the current period, Abraham Ltd distributed $300 000 dividends from current period profit. In the previous periods $200 000 had been distributed as dividends. Equities of Abraham Ltd at: Purchase date $000 Start of current year $00 1200 End of current year $000 1200 Share capital 1200 Reserves 800 800 800 700 800 Retained profits Revaluation surplus 200 200 345 Required: Prepare the equity accounting journal entries for the year ending 30 June 2012.
Ruth Ltd has a 30% investment in Abraham Ltd, which it had acquired four years ago on 1 July 2008. The cost of acquisition was $660 000. At that date all the assets and liabilities of Abraham Ltd was recorded at fair value. Ruth Ltd is a parent company. In the current period, Abraham Ltd distributed $300 000 dividends from current period profit. In the previous periods $200 000 had been distributed as dividends. Equities of Abraham Ltd at: Purchase date $000 Start of current year $00 1200 End of current year $000 1200 Share capital 1200 Reserves 800 800 800 700 800 Retained profits Revaluation surplus 200 200 345 Required: Prepare the equity accounting journal entries for the year ending 30 June 2012.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Ruth Ltd has a 30% investment in Abraham Ltd, which it had acquired four years ago on 1
July 2008. The cost of acquisition was $660 000. At that date all the assets and liabilities of
Abraham Ltd was recorded at fair value. Ruth Ltd is a parent company.
In the current period, Abraham Ltd distributed $300 000 dividends from current period profit.
In the previous periods $200 000 had been distributed as dividends.
Equities of Abraham Ltd at:
Purchase date
$000
Start of current year
$00
1200
End of current year
$000
1200
Share capital
1200
Reserves
800
800
800
700
800
Retained profits
Revaluation surplus
200
200
345
Required:
Prepare the equity accounting journal entries for the year ending 30 June 2012.
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