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Advanced Group Accounting Solution to assignment y, exercise y

Advanced Group Accounting Solution to assignment y, exercise y. First Name Last Name, University of Fribourg. «Practice does not make perfect. Only perfect practice makes perfect .» Vince Lombardi. Scenario/ case ( data. Purchase on July 1 st , 20x6

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Advanced Group Accounting Solution to assignment y, exercise y

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  1. Advanced Group AccountingSolution to assignment y, exercise y First Name Last Name, University of Fribourg «Practice does not make perfect. Only perfect practice makes perfect.» Vince Lombardi

  2. Scenario/case(data • Purchase on July 1st , 20x6 • 20% of the shares and voting rights of B • Price 500 • …… Advanced Group Accounting · 2012 page 2 Solutions

  3. a) Title • 20x6 (Equity method) IB: Record purchase of investment in B (01.07.20x6) IB: Record dividends and liquidation dividends (31.12.20x6) Investment in B (a) 500 Cash (a) 500 Cash (a) * 60 Dividend Income (inc) 40 Investment in B (a) ** 20 * 60 = 0.2 x 300 ** 20 = 60 - (0.5 x 0.2 x 400) Advanced Group Accounting · 2012 page 3 Solutions

  4. a) Title (ctn’d) CB: Opening of CB CB: Record EM-income from investee CB: Elimination of dividends CB: Amortization of BV/FV differential EM-Investment (a) * 480 Investment in B (a) 480 EM-Investment (a) ** 40 EM-Income (inc) 40 Dividend Income (inc) 40 EM-Investment (a) 40 EM-Income (inc) *** 3 EM-Investment (a) 3 * 480 = 500 - 20 ** 40 = 0.5 x 0.2 x 400 *** 3 = 0.5 x 0.2 x 300 / 10 Advanced Group Accounting · 2012 page 4 Solutions

  5. The end Thank you for your attention !

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