Question 7 0.5 pts Rock Ltd sold an item of equipment to its subsidiary Moore Ltd on 1 July 2018 for $90 000. The equipment had cost Rock Ltd $175 000 when acquired on 1 July 2018. At that time the remaining useful life of the equipment was assessed to be at 7 years. The adjustment necessary on consolidation as at 1 July 2021 in relation to the sale of the equipment will result in: an increase in retained earnings and a decrease in current year profit an increase in retained earnings and an increase in current year profit a decrease in retained earnings and an increase in current year profit a decrease in retained earnings and a decrease in current year profit D Question 8 0.5 pts On 18 June 2021, Jarvis Ltd sold a machinery to its subsidiary Gem Ltd for $200 000, this asset having a carrying amount at time of sale of $170 000. The machinery was regarded by Jarvis Ltd as a depreciable non-current asset, being depreciated at 20% p.a. on cost, whereas Gem Ltd recorded the machinery as inventory. The asset was sold by Gem Ltd before 30 June 2021. Tax rate is 30%. The worksheet entry for the year ended 30 June 2021 would include which of the following adjustments? Dr. Deferred tax assets 9 000, Cr. Machinery 30 000. Dr. Deferred tax assets 9 000, Cr. Inventories 30 000. Cr. Cost of sales 30 000, Dr. Income tax expense 9 000. Dr. Gain on disposal of machinery 30 000, Cr. Inventories 30 000. Question 9 0.5 pts A parent, Mushkin Ltd, sold inventories to its subsidiary, Pumpkin Ltd, for $80 000 in the current financial year. The goods had originally cost the parent $85 000. At the end of the year, 50% of the inventories were still on hand. The consolidation adjustment entry to eliminate this transaction will include the following journal line items? an increase in deferred tax assets and a decrement in income tax expense a decrease in deferred tax liabilities and an increase in income tax expense an increase in income tax expense and an increase in deferred tax liabilities a decrement in income tax expense and a reduction in deferred tax assets Drawiane Noct Question 10 0.5 pts When an item of a plant and machinery was revalued downwards at Group level at the acquisition date and it is now being derecognised in the current financial year, the treatment related to this item includes: Debiting the Revaluation Surplus recognised on consolidation and debiting the loss on sale of the asset after tax o Debiting the loss on sale of the asset after tax and crediting Revaluation Surplus recognised on consolidation at group level Crediting the loss on sale of the asset after tax and debiting Revaluation Surplus recognised on consolidation at group level Crediting retained earnings b/f and debiting Revaluation Surplus recognised on consolidation at group level