Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Parent Ltd owns all the share capital of Subsidiary Ltd. The following transactions relate to the financial year ended 30 June 2020. The tax rate

Parent Ltd owns all the share capital of Subsidiary Ltd. The following transactions relate to the financial year ended 30 June 2020. The tax rate is 30%.

  1. During the year ended 30 June 2020, Subsidiary Ltd sold $200,000 worth of inventory to Parent Ltd. Subsidiary Ltd recorded a $40,000 profit before tax on this transaction. Parent Ltd has one-quarter of the inventory still on hand at the end of the financial year.

  1. On 25 June 2020, Parent Ltd declared a dividend of $40,000. On the same day Subsidiary Ltd declared a $20,000 dividend.

  1. On 1 December 2019, Subsidiary leased surplus office space to Parent, at a rental payment of $18,000 per month. Rent is payable half-yearly in advance, on 1 December and 1 June each year.

Requirement:

Prepare the Consolidation Journal entries for the financial year ended 30 June 2020. [Narrationsare NOTrequired].

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

Intermediate Microeconomics And Its Application

Authors: Walter Nicholson, Christopher M. Snyder

13th Edition

0357133064, 978-0357133064

More Books

Students also viewed these Accounting questions