1.Intragroup transactions (10 marks)

Melissa Ltd owns all of the share capital of Rebecca Ltd. The income tax rate is 30%. The following transactions took place during

the periods ended 30 June 2020.

Required: In relation to the following intragroup transactions, prepare adjusting journal entries for the consolidation worksheet

on 30 June 2020.

(a) Melissa Ltd sells inventories to Rebecca Ltd for $90000 in cash. These inventories had previously cost Melissa Ltd $72000,

and remain unsold by Rebecca Ltd at the end of the period. (2.5 marks)

(b) Melissa Ltd sells inventories to Rebecca Ltd for $140000 in cash. These inventories had previously cost Melissa Ltd $104000,

and are fully sold externally. (1 Mark)

(c) Rebecca Ltd sells inventories to Melissa Ltd for $72000 in cash (the original cost to Rebecca Ltd was $48000) and 85% sold

externally. (2.5 marks)

(d) Melissa Ltd sold an equipment to Rebecca Ltd for $170000. This had a carrying amount to Melissa Ltd of $144000. Both entities

depreciate equipment at a rate of 10% p.a. on cost. (3 Marks)

(e) Rebecca Ltd paid an interim dividend of $10000 out of pre-acquisition profits. (1 Mark)