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Three questions please I need help 1. Mickey Mouse Ltd owns 85% of Donald Duck Ltd. During 2018 Mickey Mouse Ltd sells inventory for $750,000

Three questions please I need help

1. Mickey Mouse Ltd owns 85% of Donald Duck Ltd. During 2018 Mickey Mouse Ltd sells inventory for $750,000 to Donald Duck Ltd at a mark-up of 25% above cost. At the end of the financial year 50% of the inventory was unsold. What is the work paper journal entry to eliminate the effects of the intercompany sale? (1 mark)

Description

Debit

Credit

2. Goldilocks Ltd has six (6) operating segments: Paper, Machinery, Concrete, Timber, Steel, Paint, and no inter-segment sales. The following information is provided about these six segments.

Segment

Operating Profit or Loss

Non-Affiliate Sales

Identifiable Assets

Paper

(1,600)

6,400

19,400

Machinery

(2,400)

5,600

7,200

Concrete

44,000

24,000

36,000

Timber

2,200

4,000

12,000

Steel

24,000

8,000

82,000

Paint

1,800

18,000

18,000

  1. Using the revenue test, determine which of the operating segments are reportable segments? (0.5 mark)

  1. Using the operating profit test, determine which of the operating segments are reportable segments? (0.5 mark)

  1. Using the asset test, determine which of the operating segments are reportable segments? (0.5 mark)

  1. Using your answers from 1-3 and using the 75% combined revenue test determine the number of reportable segments. (0.5 marks)

3. On November 10, 2017 Goofy Ltd buys some inventory from a French supplier to be paid for in Euros () two months later on January 10, 2018. Payment was to be for 125,000. The spot rates for the 1 are as follows:

November 10, 2017, transaction date, spot rate was $1.07/ 1

December 31, 2017 balance date, spot rate was $1.09/1

January 10, 2018, settlement date, spot rate was $1.05/1.

If Goofy Ltd does not hedge the transaction, please demonstrate what journal entries Goofy Ltd would have to prepare on the transaction date, balance date and settlement date? (3 marks)

Journal

Date

Description

Debit

Credit

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