Corporate Accounting Solutions and Journal Entries

Corporate Accounting
Corporate Accounting
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Corporate Accounting
Contents
Solution1: Accounting for Investment in Joint Ventures.......................................................................3
Solution 2: Allocation to beneficiaries in case of Liquidation................................................................8
Solution 3: Journal Entries in Consolidation........................................................................................10
Solution 4: Consolidation Analysis.......................................................................................................12
References:..........................................................................................................................................14
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Corporate Accounting
Solution1: Accounting for Investment in Joint Ventures
i) Journal Entries without consolidation:
In the joint venture accounting value of the investment is increased by the share in
profit and decreased by the share in dividend (CFI, no date).
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Working Note:
Calculation of Value of Investment (Amount $)
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 Share in Profit (Amount $)
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

Corporate Accounting
Journal Entries
Sr.
No. Date Entries Amount ($)
1 01-07-
2017
Investment in Fry Ltd. A/c Dr. 50,000.00
To Cash A/c 50,000.00
(Being investment made in Fry Ltd.)
2 30-06-
2018
Investment in Fry Ltd. A/c Dr. 15,000.00
To Share in income of Fry Ltd. A/c 15,000.00
(Being profit share transferred to investment
account)
3 30-06-
2018
Cash A/c Dr. 24,000.00
To Investment in Fry Ltd. A/c 24,000.00
(Being dividend received)
4 30-06-
2019
Investment in Fry Ltd. A/c Dr. 13,500.00
To Share in income of Fry Ltd. A/c 13,500.00
(Being profit share transferred to investment
account)
5 30-06-
2019
Cash A/c Dr. 4,500.00
To Investment in Fry Ltd. A/c 4,500.00
(Being dividend received)
6 30-06-
2020
Investment in Fry Ltd. A/c Dr. 12,000.00
To Share in income of Fry Ltd. A/c 12,000.00
(Being profit share transferred to investment
account)
7 30-06-
2020
Cash A/c Dr. 3,000.00
To Investment in Fry Ltd. A/c 3,000.00
(Being dividend received)
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