On 1 July 2018 Harris Ltd purchased an 80% controlling interest in Shamin Ltd for a...
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On 1 July 2018 Harris Ltd purchased an 80% controlling interest in Shamin Ltd for a consideration of S350,000. On that date the pre-control equity of Shamin consisted of Paid up capital Retained profits General reserve Total equity $200 000 S150 000 S 50 000 $400 000 The net assets of Shamin Ltd were recorded at fair values. Relevant financial data for the two companies. for the year ending 30 June 2020. is provided on the worksheet below. Further information: During May 2019 Shamin Ltd sold inventory to Harris Ltd at a profit of S15,000. This inventory was sold by Harris Ltd to extemal parties during the month of July 2019. On 30 June 2020 Harris Ltd purchased from Shamin Ltd an item of equipment for $40,000. The equipment has a cost of $90.000 and a carrying amount of $28.000. The equipment has a remaining useful life of 4 years and a residual value of zero. Consolidation worksheet as at 30 June 2020 Harris Eliminations DR Shamin Sum Group Allocation NCI Parent CR Sales Cost of sales Gross profit Interest revenue Other revenues Gain on sale of equipment Interest expense Other expenses Net profit Retained profits 1 July 2019 620 000 225 000 700 000 300 000 520 000 140 000 1 000 000 660 000 180 000 160 000 340 000 7 000 7 000 7 500 12 000 7 000 37 000 142 000 135 500 19 200 26 700 12 000 7 000 101 200 277 500 845 000 64 200 ??? REQUIRED For the year 2020, what is the amount of net profit that NCI is entitled to? Select one: A. $27,100 В. $29,500 C. $27,700 D. $24,700 Mooloolaba Limited owns 90% of the share capital of Maroochydore Limited. Maroochydore Limited paid a dividend of $40,000 during the current period. The adjustment entries in the consolidation worksheet for the dividend include which of the following? Select one: a. Dr Dividend revenue $40 000 b. Dr Dividend receivable $40 000 c. Dr Dividend payable $36 000 d. Dr Dividend revenue $36 000 If an interim dividend is paid by a subsidiary to its parent, which of the following consolidation entries is correct to eliminate the transaction? Select one: A. Dr Dividend revenue; Cr Interim dividend paid B. Dr Interim dividend paid; Cr Dividend revenue C. Dr Interim dividend paid: Cr Dividend receivable D. Dr Dividend revenue; Cr Dividend payable On 1 July 2018 Harris Ltd purchased an 80% controlling interest in Shamin Ltd for a consideration of S350,000. On that date the pre-control equity of Shamin consisted of Paid up capital Retained profits General reserve Total equity $200 000 S150 000 S 50 000 $400 000 The net assets of Shamin Ltd were recorded at fair values. Relevant financial data for the two companies. for the year ending 30 June 2020. is provided on the worksheet below. Further information: During May 2019 Shamin Ltd sold inventory to Harris Ltd at a profit of S15,000. This inventory was sold by Harris Ltd to extemal parties during the month of July 2019. On 30 June 2020 Harris Ltd purchased from Shamin Ltd an item of equipment for $40,000. The equipment has a cost of $90.000 and a carrying amount of $28.000. The equipment has a remaining useful life of 4 years and a residual value of zero. Consolidation worksheet as at 30 June 2020 Harris Eliminations DR Shamin Sum Group Allocation NCI Parent CR Sales Cost of sales Gross profit Interest revenue Other revenues Gain on sale of equipment Interest expense Other expenses Net profit Retained profits 1 July 2019 620 000 225 000 700 000 300 000 520 000 140 000 1 000 000 660 000 180 000 160 000 340 000 7 000 7 000 7 500 12 000 7 000 37 000 142 000 135 500 19 200 26 700 12 000 7 000 101 200 277 500 845 000 64 200 ??? REQUIRED For the year 2020, what is the amount of net profit that NCI is entitled to? Select one: A. $27,100 В. $29,500 C. $27,700 D. $24,700 Mooloolaba Limited owns 90% of the share capital of Maroochydore Limited. Maroochydore Limited paid a dividend of $40,000 during the current period. The adjustment entries in the consolidation worksheet for the dividend include which of the following? Select one: a. Dr Dividend revenue $40 000 b. Dr Dividend receivable $40 000 c. Dr Dividend payable $36 000 d. Dr Dividend revenue $36 000 If an interim dividend is paid by a subsidiary to its parent, which of the following consolidation entries is correct to eliminate the transaction? Select one: A. Dr Dividend revenue; Cr Interim dividend paid B. Dr Interim dividend paid; Cr Dividend revenue C. Dr Interim dividend paid: Cr Dividend receivable D. Dr Dividend revenue; Cr Dividend payable
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1 Answer is C 27700 Current Year Profit 135500 Add Last Year Unrealise... View the full answer
Related Book For
Financial Accounting Tools for business decision making
ISBN: 978-0470534779
6th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
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