Question
Dear expert, could you please answer this question? it will be greatly appreciated. Thank you. On 1 July 2017, Ukulele Ltd acquired 40% of the
Dear expert, could you please answer this question? it will be greatly appreciated. Thank you.
On 1 July 2017, Ukulele Ltd acquired 40% of the shares of Bongo Ltd for $99,400. At this date, all the identifiable assets and liabilities of Bongo Ltd were recorded at amounts equal to fair value except for inventory which had a fair value $10,000 greater than the carrying amount. All inventory was sold by 30 June 2018. The tax rate is 30%. Bongo Ltd was classified as an associate of Ukulele Ltd.
The profits and losses recorded by Bongo Ltd from the next 6 years were as follows:
2017-18
$30,100
2018-19
5,100
2019-20
(250,000)
2020-21
(49,900)
2021-22
15,000
2022-23
20,000
Required
Prepare the journal entries for the consolidation worksheet of Ukulele Ltd for the equity accounting of Bongo Ltd in each of the years from 2017-23
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