Ch20 - Associates

Question 1

Investment into Associate workings

Answer 1

Dr W6 - Associate (Consideration) (-)
Cr Investments SoFP (-)

Question 2

W5 Group Retained Earnings

Answer 2

Add to Retained earnings:

P’s% of A’s Profit After Tax (TIME Apportioned) +
Less: Goodwill Impairment in full
Less: Associate PURP (Either Way) P’s %

Question 3

PURP

Answer 3

Remember, of profit remaining, always multiply by % owned by P

IF P sells to A:

Dr W5 (-)
Cr W6 (-)

If A sells to P:

Dr W5 (-)
Cr CoS (-) - SoFP

Question 3

W6 - Associate

Answer 3

Consideration of Associate
P’s% of A’s Profit After Tax (TIME Apportioned) +
Less: Goodwill Impairment in full
Less: Associate PURP if P sells to A - Removing

Question 4

SoPL: PURP

Answer 4

Always P’s %!!

If P sells to A: PURP added to CoS (+)
If A sells to P: PURP deducted from share of associate profit

Question 5

SoPL - Presentation

Answer 5

Minus % owned of associates profit MINUS any impairment to below the line (Below profit from Ops)

Question 6

Goodwill

Answer 6

Remove from share of associates profit