Consolidation: Solutions for Accounting, Liquidation, and Investment in Joint Venture

Consolidation
Consolidation
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Consolidation
Table of Contents
Solution: 1(i)................................................................................................................................................3
Solution: 1(ii)...............................................................................................................................................6
Solution: 2...................................................................................................................................................9
Solution: 3.................................................................................................................................................10
Solution: 4.................................................................................................................................................11
Reference:.................................................................................................................................................12
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Consolidation
Solution: 1(i)
Accounting for investment in joint venture is done as per regulated standards. According to
which investment value is increased by the amount of share in profit (Murray, 2018). Dividend
received from investment will reduce the investment value (CFI, no date).
Sr. No. Date
50,000.00
50,000.00
15,000.00
15,000.00
24,000.00
24,000.00
13,500.00
13,500.00
4,500.00
4,500.00
12,000.00
12,000.00
3,000.00
3,000.00
4 30/06/2019
30/06/20195
6 30/06/2020
2 30/06/2018
(Being profit share transferred to investment
3 30/06/2018
(Being dividend received)
Cash A/c Dr.
To Investment in Fry Ltd. A/c
(Being dividend received)
To Share in income of Fry Ltd. A/c
7 30/06/2020
(Being profit share transferred to investment
(Being profit share transferred to investment
Cash A/c Dr.
To Investment in Fry Ltd. A/c
(Being dividend received)
Investment in Fry Ltd. A/c Dr.
Amount ($)
1 01/07/2017
Investment in Fry Ltd. A/c Dr.
To Cash A/c
(Being investment made in Fry Ltd.)
Investment in Fry Ltd. A/c Dr.
To Share in income of Fry Ltd. A/c
Cash A/c Dr.
To Investment in Fry Ltd. A/c
Entries
Investment in Fry Ltd. A/c Dr.
To Share in income of Fry Ltd. A/c
Value of Investment as on 01.07.2017 50,000.00
Add: Share in profit 15,000.00
Less: Dividend Received (30%) -24,000.00
Value of Investment as on 30.06.2018 41,000.00
Add: Share in profit 13,500.00
Less: Dividend Received (30%) -4,500.00
Value of Investment as on 30.06.2019 50,000.00
Add: Share in profit 12,000.00
Less: Dividend Received (30%) -3,000.00
Value of Investment as on 30.06.2020 59,000.00
Calculation of Value of Investment (Amount $)
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Consolidation
Year 2018
Profit before tax 80,000.00
Less: Income Tax 30,000.00
Profit after tax 50,000.00
Share in Profit @ 30% 15,000.00
Year 2019
Profit before tax 70,000.00
Less: Income Tax 25,000.00
Profit after tax 45,000.00
Share in Profit @ 30% 13,500.00
Year 2020
Profit before tax 60,000.00
Less: Income Tax 20,000.00
Profit after tax 40,000.00
Share in Profit @ 30% 12,000.00
Calculation of Share in Profit (Amount $)
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