Consolidation Adjustments

Question 1

Intra company sales?

Answer 1

Eliminate 100%

Question 2

Intracompany sales double entry?

Answer 2

Debit: Sales
Credit: COS

Question 3

Intracompany loan double entry?

Answer 3

Debit: Interest income
Credit: FInance cost

Question 4

PUP adjustment of goods unsold at year end?

Answer 4

Done by increasing COS in seller’s column

Question 5

If subsidiary/parent is selling in PUP?

Answer 5

Adjustment done in subsidiary’s or parent’s column

Question 6

During the year, Salt Co sold some goods to Paprika for $32000 at a margin of 25%. Three quarter of goods remain at year end

Answer 6

(S => P)

Intragroup sales: credit COS

PURP: 32000 * 25% * 3/4 = 6000
debit COS

Question 7

Provision for unrealised profit if sub is seller?

Answer 7

Deducted

Question 8

Goodwill

Answer 8

Taken at fair value

Question 9

Parent made markup on cost 25% on these sales. Subsidiary had $1.2m of these goods in inventory as at 30 September 20X2

Answer 9

Provision unrealised profit: 1200 * 25/125 = 240
Added/debit to COS

Question 10

Contingent liability?

Answer 10

Deducted from acquisition and reporting date in NVA

Question 11

Unrealised profit provision if subsidiary is seller?

Answer 11

Deducted at reporting date in NVA

Question 12

Unrealised profit provision if parent is seller?

Answer 12

Is deducted from GRE

Question 13

PURP?

Answer 13

Always deducted from a working (is also deducted from profit after tax)

Question 14

Inventory PURP when parent is seller?

Answer 14

Debit: GRE/CoS
Credit: Inventory

Question 15

Is retained earnings a debit or credit account?

Answer 15

Credit

Question 16

What if question says GROUP RETAINED FUCKING EARNINGS

Answer 16

Any adjustments need to be multiplied by %

Question 17

Calculate group profit/loss on disposal?

Answer 17

Proceeds (P%) + NCI (S%) - net assets at disposal (100%) - goodwill (100%)

Question 18

Disposal on consolidation?

Answer 18

Disposal proceeds - net assets at disposal - goodwill at disposal

Question 19

Goodwill disposal calculation?

Answer 19

Goodwill at acquisition - (impairment * % impaired)

Question 20

Subsidiary column in a CSPL question (pro-rata or not pro-rata)?

Answer 20

Pro-rata

Question 21

Subsidiary column in a CSFP question (pro-rata or not pro-rata)?

Answer 21

Not pro-rata

Question 22

Profit after tax for the year for NCI?

Answer 22

Credit NCI

Question 23

NCI (Credit or debit)

Answer 23

Credit (Equity)

Question 24

Group retained earnings (credit or debit)

Answer 24

Credit (Equity)

Question 25

Goodwill (Credit or debit)

Answer 25

Debit (NCA)

Question 26

Unrealised provision when parent/subsidiary is seller?

Answer 26

Sub is seller: NVA
Parent is seller: GRE

(Deducted in these workings and credit inventory)

Question 27

Share of associate profit?

Answer 27

Share of associate profit * (associate ownership %)