Prepare proforma journal entries in the Consolidated Financial Statements of Pac Ltd if Pac Ltd exercise significant influence in Act Ltd.
QUESTION 1
On 1 January 2019 Pac Ltd obtained a 40% interest in the ordinary shares of Act Ltd for N$1 500 000 in cash. On this date Act Ltd’s reserves consisted of the following:
Ordinary share capital------------------N$800 000
Revaluation reserve--------------------N$200 000
The following is an extract from the
Retained earnings 01/01/20-------------------N$400 000
Revaluation Surplus 01/01/20-----------------N$250 000
Profit for the year after tax---------------------N$200 000
Other Comprehensive income for the year-----------------------------N$60 000
Dividends paid (31/12/20)-----------------------------------------N$40 000
Pac Ltd made the election to account for investment in subsidiary at cost in accordance with IAS 27 Separate financial statements.
note: NCI interest is measured at the proportionate share of the Net assets of the subsidiary
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Required To: |
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1.) |
Prepare proforma Ltd if Pac Ltd exercise significant influence in Act Ltd. |
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