Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Kangaroo Ltd owns all of the share capital of Wallaby Ltd. In relation to the following intragroup transactions, all parts of which are independent unless

Kangaroo Ltd owns all of the share capital of Wallaby Ltd. In relation to the following intragroup transactions, all parts of which are independent unless specified, prepare the consolidation worksheet adjusting entries for preparation of the consolidated financial statements as at 30 June 2020. Assume an income tax rate of 30%.

(a)During the year ending 30 June 2020, Wallaby Ltd sold $120 000 worth of inventory to Kangaroo Ltd. Wallaby Ltd recorded an $18 000 profit before tax on these transactions. At 30 June 2020, Kangaroo Ltd has one-third of these goods still on hand.(5 marks)

(b)A non-current asset with a carrying amount of $4 800 was sold by Wallaby Ltd to Kangaroo Ltd for $3 600 on 1 January 2020. Kangaroo Ltd intended to use this item as inventory, being a seller of second-hand goods. Both entities charged depreciation at the rate of 10% p.a. on the diminishing balance on non-current assets. The item was still on hand at 30 June 2020.

Step by Step Solution

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_2

Step: 3

blur-text-image_3

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

Accounting Information Systems The Crossroads Of Accounting And IT

Authors: Donna Ulmer, Donna Kay, Ali Olia

1st Edition

0132132524, 9780132132527

More Books

Students also viewed these Accounting questions

Question

Food supply

Answered: 1 week ago

Question

Mortality rate

Answered: 1 week ago