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Hello! Could I please get some help with some consolidation entries for the FY ending 30/6/23? Accounting Policies and Additional information: Q Sovereign Investments Ltd
Hello! Could I please get some help with some consolidation entries for the FY ending 30/6/23?
Accounting Policies and Additional information: Q Sovereign Investments Ltd purchased 100% of Agent International Trading Ltd for $3,700,000 on 01/07/2021. At the date of aquisition, the books of Agent showed: Share capital: $1,600,000 General reserve: $582,600 Retained earnings: $500,000 TOTAL EQUITY: $2,682,600 At date of acquisition, all identifiable net assets of Agent were recorded at fair value, with the exception of a block of land. The land had a carrying value of $1,140,000 but a fair value of $1,310,000 Over the 2023 financial year, Agent paid Sovereign $79,300 in management fees. Sovereign booked this income to 'Service revenue'. ] Sovereign invested a further $700,000 in Loan in Agent. Interest was paid at an annual rate of 16%. All interest has been fully paid/received during the financial year. O Sovereign holds no investments in equities, other than their investment in Agent International Trading Ltd. Both companies use accrual accounting when recognising interest and dividends (both paid and received). The board of directors at Sovereign declared an interim dividend of $160,350 on 20 Dec 2022 and was paid 28 days later. Final dividends for Sovereign of $267,300 was declared on 25 June 2023, and paid 28 days following. The board of directors at Agent declared an interim dividend of $58,400 on 20DeC 2022 and was paid 30 days later. Final dividend for Agent of $77,900 was declared on 20 June 2023, and paid 28 days following. Over the financial year, Agent purchased $930,000 of inventory from Sovereign, which had originally cost them $540,000. By 30 June 2023 , only 10% remained on hand. a] On 01/07/2021, Sovereign sold a machine to Agent for $489,000. The original cost of the asset was $690,000, and at the time of the sale accumulated depreciation was $241,000. The machine was estimated to have a useful remaining life of 5 years and nil residual value. Both companies use straight line depreciation. Q The company tax rate is 30%. Assume all sales are made on credit. Ignore franking credits, GST and Superannuation. Both companies are in a similar industry and use the financial year ending 30 June. The majority of income arises from the wholesale of products with a minority of service fee revenue. Auditors will check your work. Avoid combining journal entries where possible to make it easy to understand. Sovereign Consolidated Group Accounting Policies and Additional information: Q Sovereign Investments Ltd purchased 100% of Agent International Trading Ltd for $3,700,000 on 01/07/2021. At the date of aquisition, the books of Agent showed: Share capital: $1,600,000 General reserve: $582,600 Retained earnings: $500,000 TOTAL EQUITY: $2,682,600 At date of acquisition, all identifiable net assets of Agent were recorded at fair value, with the exception of a block of land. The land had a carrying value of $1,140,000 but a fair value of $1,310,000 Over the 2023 financial year, Agent paid Sovereign $79,300 in management fees. Sovereign booked this income to 'Service revenue'. ] Sovereign invested a further $700,000 in Loan in Agent. Interest was paid at an annual rate of 16%. All interest has been fully paid/received during the financial year. O Sovereign holds no investments in equities, other than their investment in Agent International Trading Ltd. Both companies use accrual accounting when recognising interest and dividends (both paid and received). The board of directors at Sovereign declared an interim dividend of $160,350 on 20 Dec 2022 and was paid 28 days later. Final dividends for Sovereign of $267,300 was declared on 25 June 2023, and paid 28 days following. The board of directors at Agent declared an interim dividend of $58,400 on 20DeC 2022 and was paid 30 days later. Final dividend for Agent of $77,900 was declared on 20 June 2023, and paid 28 days following. Over the financial year, Agent purchased $930,000 of inventory from Sovereign, which had originally cost them $540,000. By 30 June 2023 , only 10% remained on hand. a] On 01/07/2021, Sovereign sold a machine to Agent for $489,000. The original cost of the asset was $690,000, and at the time of the sale accumulated depreciation was $241,000. The machine was estimated to have a useful remaining life of 5 years and nil residual value. Both companies use straight line depreciation. Q The company tax rate is 30%. Assume all sales are made on credit. Ignore franking credits, GST and Superannuation. Both companies are in a similar industry and use the financial year ending 30 June. The majority of income arises from the wholesale of products with a minority of service fee revenue. Auditors will check your work. Avoid combining journal entries where possible to make it easy to understand. Sovereign Consolidated GroupStep by Step Solution
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