Amani Ltd owns all of the share capital of Rebecca Ltd. The following transactions took place during the periods ended 30 June 2019 or 30
Amani Ltd owns all of the share capital of Rebecca Ltd. The following transactions took place during the periods ended 30 June 2019 or 30 June 2020. 2 1. In January 2020, Amani Ltd sells inventories to Rebecca Ltd for $15,000 in cash. These inventories had previously cost Amani Ltd $10,000, and remain unsold by Rebecca Ltd at the end of the period. 2. In February 2020, Amani Ltd sells inventories to Rebecca Ltd for $17,000 in cash. These inventories had previously cost Amani Ltd $12,000, and are on-sold externally on 2 April 2020. 3. In February 2020, Rebecca Ltd sells inventories to Amani Ltd for $22,000 in cash (original cost to Rebecca Ltd was $16,000) and half are on-sold externally by 30 June 2020. 4. In March 2020, Amani Ltd sold inventories for $10,000 to Zara Ltd, an external entity. These inventories were transferred from Rebecca Ltd on 1 June 2019. The inventories had originally cost Rebecca Ltd $6,000, and were sold to Amani Ltd for $12,000.
Required
In relation to the above intragroup transactions:
a) Prepare adjusting journal entries for the consolidation worksheet at 30 June 2020.
b) Explain in detail why you made each adjusting journal entry.
Step by Step Solution
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Solution Following are the adjustment entry for consolidation for the group On January 2020 SaleDr15...See step-by-step solutions with expert insights and AI powered tools for academic success
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