Question
Duck Ltd acquired a 30% interest in P Ltd for $75,000 cash on 1 July 2021. The equity of P Ltd at the acquisition included
Duck Ltd acquired a 30% interest in P Ltd for $75,000 cash on 1 July 2021. The equity of P Ltd at the acquisition included share capital of $45,000 and retained earnings of $180,000. All the identifiable assets and liabilities of P Ltd were recorded at fair value except inventory which was understated by $4000.
Profits and dividends for the years ended 30 June 2022, 2023 and 2024 are given (see attachment).
Assuming Duck Ltd prepares consolidated financial statements, prepare consolidated worksheet entries to account for Ducks investment in the associate, P Ltd for the year ending 30 June 2024.
|
| PBT | TAX | Div paid |
| 2022 | 120,000 | 45,000 | 12,000 |
| 2023 | 105,000 | 37,500 | 30,000 |
| 2024 | 90,000 | 30,000 | 15,000 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started