Parent Ltd owns 80% of Subsidiary Ltd. In the financial year ended 30 June 20X2, Subsidiary...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Parent Ltd owns 80% of Subsidiary Ltd. In the financial year ended 30 June 20X2, Subsidiary Ltd sold inventory to Parent Ltd. Details regarding the transaction are as follows: Cost to Subsidiary to produce inventory $9000 Sale price of inventory to Parent Ltd. $12000 Percentage of inventory still held by Parent Ltd at 30 June 20X2 30% Percentage of inventory still held by Parent Ltd at 30 June 20X3 0% Tax rate 30% (i) Prepare any necessary journal entries in the consolidation journal to eliminate this transaction for the year ended 30 June 20X2. Dr Cost of goods sold (Eliminate the intra-group revenue/expense on the sale before tax) Dr Cr (Adjust for tax effects of elimination of intra-group transaction) (ii) Prepare any necessary journal entries in the consolidation journal to eliminate this transaction for the year ended 30 June 20X3. Dr Income tax expense Cr (Eliminate impact of prior year's intra-group transaction) (iii) Prepare any necessary journal entries in the consolidation journal to adjust the Non- Controlling Interests (NCI) allocation for the year ended 30 June 20X3. Dr Cr |(NCI adjustment resulting from elimination of prior year's intra-group transaction) Dr Cr |(NCI adjustment resulting from current year's effects of intra-group transaction) Parent Ltd owns 80% of Subsidiary Ltd. In the financial year ended 30 June 20X2, Subsidiary Ltd sold inventory to Parent Ltd. Details regarding the transaction are as follows: Cost to Subsidiary to produce inventory $9000 Sale price of inventory to Parent Ltd. $12000 Percentage of inventory still held by Parent Ltd at 30 June 20X2 30% Percentage of inventory still held by Parent Ltd at 30 June 20X3 0% Tax rate 30% (i) Prepare any necessary journal entries in the consolidation journal to eliminate this transaction for the year ended 30 June 20X2. Dr Cost of goods sold (Eliminate the intra-group revenue/expense on the sale before tax) Dr Cr (Adjust for tax effects of elimination of intra-group transaction) (ii) Prepare any necessary journal entries in the consolidation journal to eliminate this transaction for the year ended 30 June 20X3. Dr Income tax expense Cr (Eliminate impact of prior year's intra-group transaction) (iii) Prepare any necessary journal entries in the consolidation journal to adjust the Non- Controlling Interests (NCI) allocation for the year ended 30 June 20X3. Dr Cr |(NCI adjustment resulting from elimination of prior year's intra-group transaction) Dr Cr |(NCI adjustment resulting from current year's effects of intra-group transaction)
Expert Answer:
Related Book For
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
Posted Date:
Students also viewed these accounting questions
-
During its financial year ended 30 June 20X7 Beavers, an engineering company, has worked on several contracts. Information relating to one of them is given below: Contract X201 Date commenced...
-
At the end of the financial year ended 30 June 2015, the trial balance of Veronica, Valda and Victoria is as shown below. Victoria made her advance before 1 July 2014. Veronica and Valda each...
-
For the financial year ended 31 March 2020, the draft final accounts of Langsam Berhad and its subsidiary, Schnell Berhad are as follows: Statement of Profit and Loss for the year ended 31 March 2020...
-
Bob Bristol just called to congratulate you on your excellent work on the various assignments at CII.He now wants you to do some capacity analysis for Meghan Willoughby, the Chief Purser. Meghan is...
-
It took 75 y for 10.0 g of a radioactive isotope to decay to 1.25 g. What is the half-life of this isotope?
-
What are the keys to a firms effort to achieve success by developing innovative products?
-
Pierre Ltd is a catering business owned by well-known chef Pierre Boudin. It is organised as two divisions, each with its own manager. There is the Shop Division, managed by Louise Lane, that runs...
-
A New Hampshire resort offers year-round activities: in winter, skiing and other cold-weather activities and, in summer, golf, tennis, and hiking. The resorts operating costs are essentially the same...
-
What role did conformity play in this scenario? What type of communication climate existed after Rita arrived? What mistakes do you think Rita made as a leader in this case? What specific...
-
The proposed rates were not in the range the CEO expected given the pricing analysis. The CEO has asked the pricing actuary to verify the total projected loss cost excluding potential large storm...
-
A conductor material has a free-electron density of 1024 electrons per metre3. When a voltage is applied, a constant drift velocity of 1.5 x 10-2 metre/second is attained by the electrons. If the...
-
Outline the steps in the decision- making process for sports participation. What are the three types/levels of consumer decision making? How do the steps in the decision- making process differ for...
-
Describe three sports organizations that have a strong leader who communicates well outside the sports organization. What are the common characteristics of these leaders, and why do these leaders...
-
Why is employee motivation such an important aspect of designing todays jobs? The job characteristics model has five componentsskill variety, task identity, task significance, autonomy, and feedback....
-
Locate the organizational charts for the marketing department of two professional sports organizations. How will this structure facilitate or impede the implementation of their strategic marketing...
-
Explore some of the different tools and techniques used in neurofinance to capture the impact of emotions on trading behaviour. How reliable do you think this evidence is and what are the pros and...
-
Constitutional law 1- rule of law and legislation 2- rule of law and judiciary 3- rule of law and executive Choosing the topic issued above and explain them clearly
-
Smiths Family Fashions implemented a balanced scorecard performance measurement system several years ago. Smiths is a locally owned clothing retailer with fashions for men, women, teens, and...
-
The Blissopia Leisure Group consists of three divisions: Blissopia 1, which operates mainstream bars; Blissopia 2, which operates large restaurants; and Blissopia 3, which operates one hotel the...
-
The historical cost accounts of Smith plc are as follows: Statement of financial position of Smith plc as at 31 December 20X8 Notes 1 Land and buildings were acquired in 20X0 with the buildings...
-
Morn Ltd acquired 90% of the shares in Eve Ltd on 1 January 20X1 for £90,000 when Eve Ltds accumulated profits were £50,000. On 10 January 20X1 Morn Ltd received a dividend of...
-
Define and distinguish between an open and a closed adoption.
-
Describe the nature and purpose of putative father registries.
-
Describe the nature and significance of the biologyplus rule.
Owner American 4174 Mutu Hybrid Circle Hook Size 0 Offset Point Black - ISBN: B07FFDCRXK - Free Book
Study smarter with the SolutionInn App