Answered step by step
Verified Expert Solution
Question
1 Approved Answer
120 Marks Question 18: Group Structures Suggested Time: You should spend about 35 minutes on this section Kumar Lid acquired all the issued shares of
120 Marks Question 18: Group Structures Suggested Time: You should spend about 35 minutes on this section Kumar Lid acquired all the issued shares of Prasad Lid at July 2019. Kumar Lid paid $36, 750 in cash and 10.000 preference shares and 10,000 ordinary shares in Kumar Lid valued at $3.00 per share for preference and $3.00 per share for ordinary At this date, the equity of Prasad Lid consisted of $68.000 share capital and $4,000 retained camnings At the date of acquisition, all the identifiable assets and liabilities of Prasad Lid were recorded at amounts equal to their fair values except for: Carrying Level 1 Level 2 Level 3 Amount Fair Value Fair Value Fair Value Copyright $90,000 SIO5,000 Merchandise $18,000 $22.500 Equipment (Cost S150.000) $120,000 S123,000 The book keeping records reveal; (b) the equipment was considered to have a further 5-year life, (ii) the copyrights were sold for $1 20 000 to an external entity on 18 August 2019, and (iii) the merchandise was all sold by 30 June 2020 Additional information provided by group CEO (a) Kumar Lid sells certain raw material to Prasad Ltd to be used in its manufacturing process All July 2020. Prasad Lid held merchandise sold to it by Kumar Lid in the previous year at a profit of S600 During the 2020 21 year, Kumar Lid sold merchandise to Prasad Lid for $21.000. None of this was on hand at 30 June 2021 (6) Prasad Lid also sell items of merchandise to Kumar Ltd. During the 2020-21 year, Prasad Lid sold goods to Kumar Lid for $4.500. AL 30 June 2021, merchandise which had been sold to Kumar Lid at a profit of $300 was still on hand in Kumar Lid's merchandise. ) On July 2020. Prasad Lud sold an item of equipment to Kumar Led for $14,000. This equipment had a carrying amount in the records of Prasad Lid of $15,000 at time of sale. This type of equipment is depreciated at 10% pa, on cost (d) On January 2020. Kumar Lid sold an em of merchandise to Prasad Lid for $18,000. The merchandise had cont Kumar Lid 16.000. This item was classified by Prasad Lid as equipment Equipment of this type is depreciated by Prasad Lid at 20% pa (6) On March 2021. Prasad Ld sold an em of equipment to Kumar Lid. Whereas Prasad Lid classified this as equipment. Kumar Lid classified it as merchandise. The sales price was $9.000 which included a profit to Prasad Ltd of'S1.500. Kumar Lid sold this to another entity on 31 March 2021 for $9.900. Required Prepare all journal entries required for a consolidation worksheet for the preparation of the consolidated Financial statements of Kumar Lid ar 30 June 2021 (narrations not required)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started