Requirement:

Prepare the consolidation journal entries for 30 June 2022

Topic: Consolidation worksheet with adjustment entries for intragroup transactions: inventories, PPE, services Task Details: On 1 July 2018, Priscilla Ltd acquired all the issued shares of Lisa Marie Ltd. The consideration for the acquisition was $30000 in cash and 20000 shares in Priscilla Ltd, valued at $3 per share. At this date, the equity of Lisa Marie Ltd consisted of $66000 share capital and $6000 retained earnings. At 1 July 2018, all the identifiable assets and liabilities of Lisa Marie Ltd were recorded at amounts equal to their fair values exceot for: Ine plant was considered to have a further 5-year life. I he patents were sold for $120000 to an external entity on 18 August 2018. The inventories were all sold by 30 June 2019. Additional information (a) Priscilla Ltd sells certain raw materials to Lisa Marie Ltd to be used in its manufacturing process. At 1 July 2021, Lisa Marie Ltd held inventories sold to it by Priscilla Ltd in the previous year at a profit of $600. During the 2021-22 year, Priscilla Ltd sold inventories to Lisa Marie Ltd for $21000. None of the inventories are on hand at 30 June 2022. (b) Lisa Marie Ltd also sells items of inventories to Priscilla Ltd. During the 2021-22 year, Lisa Marie Ltd sold goods to Priscilla Ltd for $4500. At 30 June 2022, inventories which had been sold to Priscilla Ltd at a profit of $300 are still on hand in Priscilla Ltd's inventories. (c) On 1 July 2021, Lisa Marie Ltd sold an item of plant to Priscilla Ltd for $15000 that had cost Lisa Marie Ltd $14000 on the same date. This type of plant is depreciated at 10% p.a. on cost. (d) On 1 January 2021, Priscilla Ltd sold inventories to Lisa Marie Ltd for $18000. The inventories had cost Priscilla Ltd $16000. This item was classified by Lisa Marie Ltd as plant and depreciated at 20% p.a. (e) On 1 March 2022, Lisa Marie Ltd sold an item of plant to Priscilla Ltd. Whereas Lisa Marie Ltd classified this as plant, Priscilla Ltd classified it as inventories. The sales price was $9000, which included a profit to Lisa Marie Ltd of $1500. Priscilla Ltd sold this asset to another entity on 31 March 2022 for $9900. (f) The tax rate is 30%. The following financial information was provided by the two companies for 30 June 2022 : \begin{tabular}{|l|l|l|l|l|} \hline & \multicolumn{3}{|l|}{ Priscilla Ltd } & \multicolumn{2}{l|}{ Lisa Marie Ltd } \\ \hline & Dr & Cr & Dr & Cr \\ \hline Sales revenue & & 64500 & & 78000 \\ \hline Cost of sales & 30900 & & 46350 & \\ \hline Trading expenses & 4800 & & 9000 & \\ \hline Office expenses & 7950 & & 4050 & \\ \hline Depreciation expenses & 1800 & & 3900 & \\ \hline Proceeds on sale of plant & & 9000 & & 15000 \\ \hline Carrying amount of plant sold & 7500 & & 14000 & \\ \hline Income tax expense & 11100 & & 7300 & \\ \hline Share capital & & 96000 & & 66000 \\ \hline Retained earnings (1/7/21) & & 48000 & & 31500 \\ \hline Current liabilities & & 21100 & & 10500 \\ \hline Deferred tax liability & & 11000 & & 15000 \\ \hline Plant & 57000 & & 107250 & \\ \hline Accumulated depreciation - plant & & 18300 & & 33450 \\ \hline Intangibles & 12000 & & 11100 & \\ \hline Deferred tax assets & 8100 & & 9450 & \\ \hline Shares in Lisa Marie Ltd & 90000 & & 0 & \\ \hline Inventories & 28500 & & 24600 & \\ \hline Receivables & 8250 & & 12450 & \\ \hline & 267900 & 267900 & 249450 & 249450 \\ \hline \end{tabular} Topic: Consolidation worksheet with adjustment entries for intragroup transactions: inventories, PPE, services Task Details: On 1 July 2018, Priscilla Ltd acquired all the issued shares of Lisa Marie Ltd. The consideration for the acquisition was $30000 in cash and 20000 shares in Priscilla Ltd, valued at $3 per share. At this date, the equity of Lisa Marie Ltd consisted of $66000 share capital and $6000 retained earnings. At 1 July 2018, all the identifiable assets and liabilities of Lisa Marie Ltd were recorded at amounts equal to their fair values exceot for: Ine plant was considered to have a further 5-year life. I he patents were sold for $120000 to an external entity on 18 August 2018. The inventories were all sold by 30 June 2019. Additional information (a) Priscilla Ltd sells certain raw materials to Lisa Marie Ltd to be used in its manufacturing process. At 1 July 2021, Lisa Marie Ltd held inventories sold to it by Priscilla Ltd in the previous year at a profit of $600. During the 2021-22 year, Priscilla Ltd sold inventories to Lisa Marie Ltd for $21000. None of the inventories are on hand at 30 June 2022. (b) Lisa Marie Ltd also sells items of inventories to Priscilla Ltd. During the 2021-22 year, Lisa Marie Ltd sold goods to Priscilla Ltd for $4500. At 30 June 2022, inventories which had been sold to Priscilla Ltd at a profit of $300 are still on hand in Priscilla Ltd's inventories. (c) On 1 July 2021, Lisa Marie Ltd sold an item of plant to Priscilla Ltd for $15000 that had cost Lisa Marie Ltd $14000 on the same date. This type of plant is depreciated at 10% p.a. on cost. (d) On 1 January 2021, Priscilla Ltd sold inventories to Lisa Marie Ltd for $18000. The inventories had cost Priscilla Ltd $16000. This item was classified by Lisa Marie Ltd as plant and depreciated at 20% p.a. (e) On 1 March 2022, Lisa Marie Ltd sold an item of plant to Priscilla Ltd. Whereas Lisa Marie Ltd classified this as plant, Priscilla Ltd classified it as inventories. The sales price was $9000, which included a profit to Lisa Marie Ltd of $1500. Priscilla Ltd sold this asset to another entity on 31 March 2022 for $9900. (f) The tax rate is 30%. The following financial information was provided by the two companies for 30 June 2022 : \begin{tabular}{|l|l|l|l|l|} \hline & \multicolumn{3}{|l|}{ Priscilla Ltd } & \multicolumn{2}{l|}{ Lisa Marie Ltd } \\ \hline & Dr & Cr & Dr & Cr \\ \hline Sales revenue & & 64500 & & 78000 \\ \hline Cost of sales & 30900 & & 46350 & \\ \hline Trading expenses & 4800 & & 9000 & \\ \hline Office expenses & 7950 & & 4050 & \\ \hline Depreciation expenses & 1800 & & 3900 & \\ \hline Proceeds on sale of plant & & 9000 & & 15000 \\ \hline Carrying amount of plant sold & 7500 & & 14000 & \\ \hline Income tax expense & 11100 & & 7300 & \\ \hline Share capital & & 96000 & & 66000 \\ \hline Retained earnings (1/7/21) & & 48000 & & 31500 \\ \hline Current liabilities & & 21100 & & 10500 \\ \hline Deferred tax liability & & 11000 & & 15000 \\ \hline Plant & 57000 & & 107250 & \\ \hline Accumulated depreciation - plant & & 18300 & & 33450 \\ \hline Intangibles & 12000 & & 11100 & \\ \hline Deferred tax assets & 8100 & & 9450 & \\ \hline Shares in Lisa Marie Ltd & 90000 & & 0 & \\ \hline Inventories & 28500 & & 24600 & \\ \hline Receivables & 8250 & & 12450 & \\ \hline & 267900 & 267900 & 249450 & 249450 \\ \hline \end{tabular}