Panther Co owns 80% of Tiger Co. An extract from the companies' individual statements of financial position as at 30 June 20X8 shows the following:
Panther Co ($) Tiger Co ($)
Property, plant and
equipment carrying amount 370,000 285,000
On 1 July 20X7, Panther Co sold a piece of equipment which had a carrying amount of $70,000 to Tiger Co for $150,000. The equipment had an estimated remaining life of five years when sold.
What is the carrying amount of property, plant and equipment in the consolidated statement of financial position of Panther Co as at 30 June 20X8 (to the nearest $'000)?
can you please help me solve this please
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Combined total: Add Panther ($370,000) and Tiger ($285,000) = $655,000
Initial profit: Subtract the old carrying amount ($70,000) from the sale price ($150,000) = $80,000 profit
Depreciation adjustment: Tiger charged $30,000 per year instead of the correct $14,000, i.e. $16,000 of excess depreciation.
Remaining unrealised profit: Subtract the excess depreciation ($16,000) from the initial profit ($80,000) = $64,000.
Final balance: Subtract the remaining unrealised profit ($64,000) from the combined total ($655,000) = $591,000.
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