IndigoLearn

Forums

Consolidated Financial statements

What is the adjustment for dividend paid to minority shareholders in Cons. FS ? Where is this amount adjusted ? In case of Holding co. It is adjusted either by bank and p&l in case of post acquisition AND P&l and investment in case of Pre acquisition( if cr wrongly before ) But, how to adjust the balance amount of dividend for minority shareholders?


Madhaan S

Madhaan S

CA Inter

14K+

14-May-22

64

Answers (16)

It's normal payment of dividend. So, the entry will be(assuming no entry for payment of dividend is passed) Profit and Loss A/c. Dr. To Bank A/c You don't have to do anything in the Minority Interest working note. Just make sure to reduce the amount from Profit and Loss A/c in Analysis of Profit of Subsidiary and from its Bank A/c.


Pratik Badade

Pratik Badade

CA Inter

2K+

15-May-22

Can you send the picture?


Pratik Badade

Pratik Badade

CA Inter

2K+

15-May-22

I followed sathya sir method.

Screenshot_2022-05-15-10-21-30-747_com.google.android.apps.docs.jpg

Thread Starter

Madhaan S

Madhaan S

CA Inter

14K+

15-May-22

I worked out.

IMG-20220515-WA0000.jpg

Thread Starter

Madhaan S

Madhaan S

CA Inter

14K+

15-May-22

SM ans

Screenshot_2022-05-15-10-32-02-661_com.google.android.apps.docs.jpg

Thread Starter

Madhaan S

Madhaan S

CA Inter

14K+

15-May-22

Thread Starter

Madhaan S

But, in one sum in SM, they reduced the dividend from minority interest. That's why i had a doubt.

I cannot see any reduction in dividend from minority interest. The amount of Rs. 22,500 reduced in the working note is for profit and loss A/c.


Pratik Badade

Pratik Badade

CA Inter

2K+

15-May-22

Sorry, i mean why they adjusted the dividend of Rs.4500 in the minority interest. The minority interest will be Rs.54000 only right ? See my workings.


Thread Starter

Madhaan S

Madhaan S

CA Inter

14K+

15-May-22

They have not adjusted the dividend in Minority interest. Rs. 150,000 is share capital, Rs. 90,000 is opening balance of Profit and Loss A/c and Rs. 30,000 is profit earned during the year. Then after that they reduced entire amount of Rs. 22,500 from this. That means they have passed the entry Profit and Loss A/c Dr. 22,500 To Bank A/c. 22,500 (Being payment of Dividend)


Pratik Badade

Pratik Badade

CA Inter

2K+

15-May-22

Thread Starter

Madhaan S

Oh ok...Thanks a lot for devotion of your time ! Then, is my workings correct ?

No, your working is not correct. You have to reduce the amount of dividend from Profit and Loss A/C first. Then you should calculate the Minority Interest. The working given by ICAI is correct. Maybe a faculty will explain this better to you.


Pratik Badade

Pratik Badade

CA Inter

2K+

15-May-22

Pratik Badade

No, your working is not correct. You have to reduce the amount of dividend from Profit and Loss A/C first. Then you should calculate the Minority Interest. The working given by ICAI is correct. Maybe a faculty will explain this better to you.

Actually sathya sir taught this method of calculation bcoz the book methods are somewhat confusing. Are you a student of indigolearn, are you aware of this method of calculation.


Thread Starter

Madhaan S

Madhaan S

CA Inter

14K+

15-May-22

No I am not a student of Satya Sir. Irrespective of the method the answer should not differ.


Pratik Badade

Pratik Badade

CA Inter

2K+

15-May-22

Thread Starter

Madhaan S

I worked out.

Why did you add back dividend? The question mentions that the company has earned profit of 30,000 during the year. This is before payment of dividend. Remove that 22,500 addition and your answer will match with ICAI solution.


Suraj Lakhotia

Suraj Lakhotia

Admin

16-May-22

All the best
Quote for the Day
Past_Exams
revise
CUET 2
Flash Sale Byte size
Choose ICAI Exams over IPL
Wishes to Rankers
CA Foundation Testimonials
Combo Discounts
Study Planner
Tally + Excel Free
Refer
EMI