Question
For each of the following independent intra-group transaction scenarios, assume that the consolidation process is done on 31 December 2020 . Required: Prepare the necessary
For each of the following independent intra-group transaction scenarios, assume that the consolidation process is done on 31 December 2020.
Required:
- Prepare the necessary consolidation journal entries in each scenario. Preston Ltd owns 80% share capital of Sutherland Ltd. The tax rate is 30%. (narrations are not required).
| Scenario 1: | On 30 November 2020, Sutherland Ltd sold goods to Preston Ltd for $650,000, one-fifth of which remain in Prestons inventories at 31 December 2020. Sutherland Ltd earns 35% mark-up on all item sold.
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| ANSWER HERE: | (3 marks) | ||||||||||||||||||||||||||||||||||||
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Introduction to Managerial Accounting
Authors: Peter Brewer, Ray Garrison, Eric Noreen
7th edition
978-0078025792
