Topic08_SeminarQuestions

Topic08_SeminarQuestions - 1 Week 5 18 Jan. (DM) Lecture...

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1 Week 5 18 Jan. (DM) Lecture Topic 8 Consolidation: Intra-group transactions Prepare consolidated journal entries for: o Intra-group sale of inventory o Unrealised profit in opening inventory o Unrealised profit in closing inventory o Intra-group transfer and unrealised profit in plant including excess depreciation o Intra-group borrowings and interest o Inter-company dividends (pre and post acq) Prepare comprehensive consolidation worksheet Seminar Questions: Picker et al, Ch.24 DQ1 Exercise 24.1
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2 Chapter 22 – Controlled entities: the consolidation method Chapter 24 – Consolidation: intragroup transactions DISCUSSION QUESTIONS 1. Why is it necessary to make adjustments for intragroup transactions? The consolidated financial statements are the statements of the group, an economic entity consisting of the parent and its subsidiaries. The consolidated financial statements then can only contain profits, assets and liabilities that relate to parties external to the group. Adjustments must be made for intragroup transactions as these are internal to the economic
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Topic08_SeminarQuestions - 1 Week 5 18 Jan. (DM) Lecture...

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