Answered step by step
Verified Expert Solution
Question
1 Approved Answer
report on Consolidated financial statements and calculations - Individual assessment.Purpose: This assessment is designed to allow students to research and analyse accounting standards and interpret
report on Consolidated financial statements and calculations Individual assessment.Purpose: This assessment is designed to allow students to research and analyse accounting standards and interpret how they apply to various corporate groups. It enables students to identify and solve problems relating to accounting for consolidated groups. This relates to learning outcomes a b and cValue: Due Date: Week Friday : pmTopic: Consolidation worksheet with adjustment entries for intragroup transactions: inventories, PPE, dividends, and debentures.Task Details:On July Ingrid Ltd acquired all the issued shares of Isabella Ltd The consideration for the acquisition was $ cash plus shares in Ingrid Ltd which had a fair value of $ per share.At the acquisition date, Isabella Ltd had inventories with a fair value $ greater than carrying amount.All these inventories were sold by Isabella Ltd prior to June Isabella Ltd conducts a research and development division. It has expensed all past outlays. At the acquisition date, Ingrid Ltd assessed there was an inprocess research and development asset with a fair value of $ Ingrid decided that $ of this asset should be impaired for the year to June The income tax rate is Intragroup transactions occurring in the annual period ended June were as follows.a During the course of the year, Isabella Ltd sold inventories to Ingrid Ltd Total sales were $ these being sold at cost plus At June Ingrid Ltd still held inventories that it had bought from Isabella Ltd for $b On January Ingrid Ltd acquired $ debentures previously issued by Isabella LtdThese were acquired on the open market for $ Interest on debentures is paid halfyearly. Interest due on June has been paid by Isabella Ltdc On April Ingrid Ltd sold an inventory item to Isabella Ltd for $ This asset had cost Isabella Ltd $ to manufacture. The asset is used by Isabella Ltd as part of its plant and machinery.The depreciation rate used by Isabella Ltd for this type of asset is pa on costd On March Isabella Ltd declared and paid a dividend of $ from its profits. On June Isabella Ltd declared a further dividend of $The financial information provided by the two entities for June was as follows:SalesDividend revenueIngrid Ltd$ Isabella Ltd$ Other incomegainsCost of salesOther expensesProfit before income taxIncome tax expenseProfit for the yearRetained earnings Dividend paidDividend declaredRetained earnings Share capitalGeneral reserveTotal equity$ $ Deferred tax liabilities$ $ debenturesDividend payableProvisionsPayablesTotal liabilities$ $ Total equity and liabilities$ $ Plant and machineryAccumulated depreciationLandDebentures in Isabella LtdShares in Isabella LtdCashReceivablesInventoriesTotal assets$ $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started