Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(a) Fred Ltd owns all of the share capital of Wilma Ltd. The income tax rate is 30%. The following transactions took place during the

(a)    Fred Ltd owns all of the share capital of Wilma Ltd. The income tax rate is 30%. The following transactions took place during the periods ended 30 June 2022 and 30 June 2023.

(i)             On 10 June 2022, Fred Ltd sold inventories to Wilma Ltd for $18 000 in cash. The inventories had previously cost Fred Ltd $14 000. Half of these inventories were unsold by Wilma Ltd at 30 June 2022 and 30% at 30 June 2023.    

(ii)             On 1 July 2021, Fred Ltd sold equipment costing $10 000 to Wilma Ltd for $12 000. Fred Ltd had not charged any depreciation on the asset before the sale as it just purchased it from an external entity. Both entities depreciate items of equipment at 10% p.a. on cost. The equipment is still held by Wilma Ltd at 30 June 2023. Neither entity uses a Gain on Sale account.                               

Required

In relation to the above intragroup transactions, prepare the Adjusting journal entries for the consolidation worksheet at 30 June 2022 and 30 June 2013. Only the adjusting entries need to be shown.

Step by Step Solution

3.46 Rating (159 Votes )

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting principles and analysis

Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso

2nd Edition

471737933, 978-0471737933

More Books

Students also viewed these Accounting questions

Question

What are adverse selection and moral hazard? What causes them?

Answered: 1 week ago

Question

True or False The domain of y = sin -1 x is /2 x /2.

Answered: 1 week ago