Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

This is the whole Q provided Soran Ltd had the following balance sheet - Soran Ltd purchased a 30 percent shareholding in Krall Ltd on

image text in transcribed

This is the whole Q provided

Soran Ltd had the following balance sheet - Soran Ltd purchased a 30 percent shareholding in Krall Ltd on 1 Jan 20X8 for $90,000. This purchase resulted in Soran having significant influence over Krall. - Soran owns 15 percent and had significant influence in Dukat Ltd for last six years. - Soran Ltd does not have any share investments that confer control. - On 1 January 208 Krall's assets were recorded at fair values and its owners' equity, totalling $190,000, was: > share capital $150,000 > retained profits $40,000 - During the 208 year Krall reported profit of $90,000 and revalued its assets upwards by $70,000. - Dividend that Krall paid out of current year profit amounted to $60,000. - During the 20X8 year, Dukat Ltd sold inventory to Krall and made profit of $90,000. Half of this inventory was still held by Krall Ltd by year-end. Required: Prepare journal entries for Soran Ltd to record all events in 208 for its investment in Krall Ltd. Use Australian Accounting Standards but classify income from associates in a way that would provide appropriate information regarding prudent distribution of cash flows. Use the separate recognition method

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_2

Step: 3

blur-text-image_3

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

Management Accounting

Authors: Charles T Horngren, Gary L Sundem, William O Stratton, Howard D Teall, George Gekas

5th Canadian Edition

0131922688, 978-0131922686

More Books

Students also viewed these Accounting questions

Question

What does the slope in a simple linear regression model measure?

Answered: 1 week ago