Practice question 11.1

Koala Ltd owns all of the shares of Kangaroo 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 2019. Assume an income tax rate of 30%.

1. In April 2019, Koala Ltd sells inventory to Kangaroo Ltd for $12 000. This inventory had previously cost Koala Ltd $8000, and it remains unsold by Kangaroo Ltd at the end of the period.
2. All the inventory in (a) is sold to Cockatoo Ltd, an external party, for $16500 on 19 June 2019.
3. Half the inventory in (a) is sold to Galah Ltd, an external party, for $7200 on 20 June 2019. The remainder is still unsold at the end of the period.

Practice question 11.3

Dingo Ltd owns all of the shares of Bilby Ltd. In relation to the following intragroup transaction, On 1 January 2018, Dingo Ltd sold inventory costing $6000 to Bilby Ltd at a transfer price of $8000. On 1 September 2018, Bilby Ltd sold half these items of inventory back to Dingo Ltd, receiving $3000 from Dingo Ltd. Of the remaining inventory kept by Bilby Ltd, half was sold in January 2019 to Goanna Ltd at a loss of $200.

Required

Prepare the consolidation worksheet adjusting entries for preparation of the consolidated financial statements as at 30 June 2019. Assume an income tax rate of 30%.

Practice Question 11.3

Dingo Ltd owns all of the shares of Bilby 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 2019. Assume an income tax rate of 30%.

1. On 1 January 2019, Bilby Ltd sold an item of plant to Dingo Ltd for $2000. Immediately before the sale, Bilby Ltd had the item of plant on its accounts for $3000. Bilby Ltd depreciated items at 5% p.a. on the diminishing balance and Dingo Ltd used the straight-line method over 10 years.

1. On 1 July 2018, Dingo Ltd sold a motor vehicle to Bilby Ltd for $12 000. This had a carrying amount to Dingo Ltd of $9600. Both entities depreciate motor vehicles at a rate of 10% p.a. on cost.

Practice Question 11.2

Numbat Ltd owns all of the shares of Goanna 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 2019. Assume an income tax rate of 30%.

1. On 1 July 2018, Numbat Ltd sold an item of plant costing $15 000 to Goanna Ltd for $18 000. Numbat Ltd had not charged any depreciation on the plant before the sale. Both entities depreciate assets at 10% p.a. on cost.
2. On 1 January 2017, Goanna Ltd sold a new tractor to Numbat Ltd for $30 000. This had cost Goanna Ltd $24 000 on that day. Both entities charged depreciation at the rate of 10% p.a. on cost.