Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Red Ltd owns 100% of the share capital and is the parent company of Blue Ltd. The company tax rate is 30%. Blue Ltd declared

  1. Red Ltd owns 100% of the share capital and is the parent company of Blue Ltd. The company tax rate is 30%. Blue Ltd declared a final dividend of $25,000 out of the current year's operation profit. The dividend will be paid in the following period. Red Ltd. records income when it is declared.

Required: Prepare the necessary consolidation entries.

  1. Red Ltd sold equipment to Blue Ltd for $190 000. It had a carrying amount in the books of Red Ltd at the time of sale of $165 000. Depreciation charged on equipment by Red Ltd is 10% on cost however, Blue Ltd applies a rate of 5% on cost.

Required: Prepare the necessary consolidation entries. Show workings in narrations.

  1. On July 1 2023, Red Ltd lends Blue Ltd $800 000, charging 6% interest per annum.

Required: prepare the necessary consolidation entries at 30 June 2024.

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

Step: 3

blur-text-image

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

Financial Accounting Tools For Business Decision Making

Authors: Paul D. Kimmel

4th Canadian Edition

0470155353, 978-0470155356

More Books

Students also viewed these Accounting questions

Question

Identify by name three important groups of percentiles.

Answered: 1 week ago