(b) on 1 July 2017 Wolfgang Ltd acquired 45% of the ordinary shares of Atkinson Ltd for $550 000. At this date, all the identifiable assets and liabilities of Atkinson Ltd were recorded at amounts equal to their fair values. Atkinson Ltd is considered to be an associate of Wolfgang Ltd. Wolfgang Ltd has no subsidiaries, and records its investment in the associate, Atkinson Ltd, in accordance with AA SB 128. Atkinson Ltd recorded an after-tax profit of $165 000 for the 2019-20 period and declared a dividend of 547 000 in June 2020. Wolfgang Ltd recognises dividends when they are declared. The following transactions have occurred between the two entities: (0) In May 2020, Atkinson Ltd sold inventory to Wolfgang Ltd for $105 000. The cost of this inventory was $101 200. All of this inventory remained unsold at 30 June 2020. 00) On 1 July 2019, Wolfgang Ltd sold a machine to Atkinson Ltd for $90 000. The machine had originally cost Wolfgang Ltd $175 000 and was written down to $75 000 for both tax and accounting purposes, at the time of its sale to Atkinson Ltd. Both companies depreciate machines at 20% per annum on straight line basis. (H) A non-current asset with a carrying amount of $21 500 was sold by Atkinson Ltd to Wolfgang Ltd for $26 000 on 1 June 2020. Wolfgang Ltd regarded the item as inventory and still had the item on hand at 30 June 2020. (iv) The beginning inventory of Atkinson Ltd included goods at $35 000 bought from Wolfgang Ltd; their cost to Wolfgang Ltd was $28 000. All of this inventory was sold by 30 June 2020. Required: Show your calculations of Wolfgang Ltd's share of Atkinson Ltd's profit for the year ended 30 June 2020. Prepare the joumal entries in the records of Wolfgang Ltd in relation to its investment in Atkinson Ltd for the year ended 30 June 2020. The tax rate is 30%. (b) on 1 July 2017 Wolfgang Ltd acquired 45% of the ordinary shares of Atkinson Ltd for $550 000. At this date, all the identifiable assets and liabilities of Atkinson Ltd were recorded at amounts equal to their fair values. Atkinson Ltd is considered to be an associate of Wolfgang Ltd. Wolfgang Ltd has no subsidiaries, and records its investment in the associate, Atkinson Ltd, in accordance with AA SB 128. Atkinson Ltd recorded an after-tax profit of $165 000 for the 2019-20 period and declared a dividend of 547 000 in June 2020. Wolfgang Ltd recognises dividends when they are declared. The following transactions have occurred between the two entities: (0) In May 2020, Atkinson Ltd sold inventory to Wolfgang Ltd for $105 000. The cost of this inventory was $101 200. All of this inventory remained unsold at 30 June 2020. 00) On 1 July 2019, Wolfgang Ltd sold a machine to Atkinson Ltd for $90 000. The machine had originally cost Wolfgang Ltd $175 000 and was written down to $75 000 for both tax and accounting purposes, at the time of its sale to Atkinson Ltd. Both companies depreciate machines at 20% per annum on straight line basis. (H) A non-current asset with a carrying amount of $21 500 was sold by Atkinson Ltd to Wolfgang Ltd for $26 000 on 1 June 2020. Wolfgang Ltd regarded the item as inventory and still had the item on hand at 30 June 2020. (iv) The beginning inventory of Atkinson Ltd included goods at $35 000 bought from Wolfgang Ltd; their cost to Wolfgang Ltd was $28 000. All of this inventory was sold by 30 June 2020. Required: Show your calculations of Wolfgang Ltd's share of Atkinson Ltd's profit for the year ended 30 June 2020. Prepare the joumal entries in the records of Wolfgang Ltd in relation to its investment in Atkinson Ltd for the year ended 30 June 2020. The tax rate is 30%
