Unit 11 - Grp Rep - Consol Fin Stat

Adjusts all items in transits to or from parent on

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Unformatted text preview: 80% $000 3,200 720 3,920 88 3,832 30 Example 2 - Solution (2) Consolidation Adjustment Journals 1. Adjusts all items-in-transits to or from parent on consolidation: Goods in Transit [sent out by H Ltd (seller)] Current account with S Ltd (H Ltd) Cash in Transit [not rec’d by H Ltd (seller)] Current account with S Ltd (H Ltd) Dr Cr $000 $000 300 300 100 100 H Ltd : Current a/c with S Ltd adjusted to = $900 (i.e. $1300-$300-$100) S Ltd : Current a/c with H Ltd remained unchanged = $900 31 (2) Consolidation Adj. Journals 2. 3. 4. 5. Share capital (S Ltd) Retained profits (S Ltd) Goodwill (on consolidation) Investment in S Ltd (H Ltd) Non-controlling interests Consolidated retained profits (80%) Non-controlling interests (20%) Goodwill (on consolidation) $000 2,000 400 225 $000 2,100 525 88 22 110 Retained profits (S Ltd) (post-acq.=900-400) Proposed final dividends (S Ltd) (post-acq.) Consolidated R/P [(500+400)x80%] Non-controlling interests [(500+400)x20%] 500 400 Current account with H Ltd (S Ltd) Current account with S Ltd (H Ltd) 900 720 180 900 32 (3) Consolidation Worksheet Non-current assets Investment in S Ltd Current assets Goods in transit Cash in transit Current account with S Ltd Goodwill Less: Current liabilities Creditors Current account with H Ltd Ordinary share capital Consolidated...
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