Question
Maggie Ltd owns all the share capital of Taylor Ltd. The following intragroup transactions took place during the periods ended 30 June 2022 or 30
Maggie Ltd owns all the share capital of Taylor Ltd. The following intragroup transactions took place during the periods ended 30 June 2022 or 30 June 2023.
During the period ended 30 June 2022, Taylor Ltd paid an interim dividend of $40000 out of pre-acquisition profits. As a result, the investment in Taylor Ltd is considered to be impaired by $40000.
On 30 June 2022, Taylor Ltd declared a final dividend of $25000 out of post-acquisition profits.
During the period ended 30 June 2023, Taylor Ltd paid an interim dividend of $30000 out of post-acquisition profits.
On 30 June 2023, Taylor Ltd declared a final dividend of $50000 out of post-acquisition profits.
In relation to the above intragroup transactions: 1) prepare adjusting journal entries for the consolidation worksheet at 30 June 2022 and 30 June 2023
2) explain in detail why you made each adjusting journal entry.
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