Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Senior Ltd owns 100% of the issued shares of Junior Ltd. The following financial position of Senior ltd and its subsidiary Junior ltd have been

Senior Ltd owns 100% of the issued shares of Junior Ltd. The following financial position of Senior ltd and its subsidiary Junior ltd have been extracted at 30 June 2016:

Senior Ltd

($ million)

Junior Ltd

($ million)

Shareholders equity

Retained earnings

152.8

115.78

Share capital

164.06

93.75

Current liabilities

Accounts payable

-

21.7

Tax payable

37.5

11.72

Non-current liabilities

Loans

88.5

54.38

442.86

297.33

Current assets

Accounts receivable

27.84

29.2

Inventory

43.02

13.59

Non-current assets

Land and buildings

74.5

152.8

Plant at cost

150

166.78

Accumulated depreciation

(40)

(65.04)

Investment in Junior Ltd

187.5

442.86

297.33

On 1 July 2015, Senior Ltd sold an item of plant to Junior Ltd for 1.35 million. This plant carrying value in Senior Ltds accounts was $1.0125 million (cost $1.6875 million and accumulated depreciation $0.675 million). The remaining useful life of the plant is assessed as 12 years and the tax rate is 33%.

Required:

Provide the consolidation journal entries for 30 June 2016 and 30 June 2017 to adjust for the above sale.


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

The Digital Transformation Of Auditing And The Evolution Of The Internal Audit

Authors: Nabyla Daidj

1st Edition

1032103914, 978-1032103914

More Books

Students also viewed these Accounting questions

Question

Question 1 (a2) What is the reaction force Dx in [N]?

Answered: 1 week ago