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Intragroup transactions Layla Ltd owns all the share capital of Isabel Ltd. In relation to the following intragroup transactions, prepare adjusting journal entries for the

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Intragroup transactions Layla Ltd owns all the share capital of Isabel Ltd. In relation to the following intragroup transactions, prepare adjusting journal entries for the consolidation worksheet at 30 June 2013.Assume an income tax rate of 30% and that all income on sale of assets is taxable and expenses are deductable. (a) During the year ending 30 June 2013, Isabel Ltd sold $50 000 worth of inventory to Layla Ltd. Isabel Ltd recorded a $10 000 profit before tax on these transactions. At 30 June 2013, Layla Ltd has one-quarter of theses goods still on hand. (b) Isabel Ltd sold a warehouse to Layla Ltd for $100 000. This had originally cost Isabel Ltd $82 000. The transaction took place on 1 January 2012. Layla Ltd charges depreciation at 5% p.a. on a straight-line basis. (c) During the 2012-13 period, Layla Ltd sold inventory costing $12 000 to Isabel Ltd for $18 000. One third of this was sold to Olivia Ltd for $9500 and one-third to Taylah Lts for $9000. (d) On 1 January 2012, Isabel Ltd sold inventory costing $6000 to Layla Ltd at a transfer price of $8000. On 1 September 2012, Layla Ltd sold half these goods back to Isabel Ltd, receiving $3000 from Isabel Ltd. Of the remainder kept by Layla Ltd, half sold in January 2013 to Anna Ltd at a loss of $200. (e) On 25 June 2013, Layla Ltd declared a dividend of $10 000. On the same day, Isabel Ltd declared a $5000 dividend. (f) On 1 October 2012, Layla Ltd issued 1000 15% debentures of $100 at nominal value. Isabel Ltd acquired 400 of these. Interest is payable half-yearly on 31 March and 30 September. Accurals have been recognized in the legal entities' accounts. (g) During the 2011-12 period, Layla Ltd sold inventory to Isabel Ltd for $10 000, recording before-tax profit of $2000. Half this inventory was unsold by Isabel Ltd at 30 June 2012

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