White Limited is the only shareholder of Brown Limited Given below are independent intragroup transactions for the period ending 30 th June 2019 During the year ending 30 th June 2019, Brown Limited sold inventory worth $50,000 to White Limited Brown Limited made a profit after tax of $8,000 On 30 th June 2019, White Limited has sold 45 of these goods to Tony and 20 to Sam White Limited sold a depot to Brown Limited for $150,000 This had originally cost White Limited $120,000 The transaction took place on 1 st January 2017 Brown Limited charges depreciation at 5 per annum on a straight line basis On 1 st June 2018, Brown Limited sold inventory costing $15,000 at a mark up of 40 to White Limited By 30 th June 2018, 30 of these inventories were sold to Jacob and the remaining 70 was sold on 2 nd July 2019 to Andrew On 1 st January 2018, White Limited sold inventory costing $10,000 to Brown Limited at a transfer price of $15,000 On 3 rd September 2018, Brown Limited sold half of these inventories back to White Limited, receiving $6,000 from White Limited Of the remainder kept by Brown Limited, one third was sold in March 2019 to Simran at a profit of $5,000 On 29 th June 2019, White Limited declared a dividend of $15,000 On 1 st October 2018, White Limited issued 1,000 10 debentures of $100 at nominal value Brown Limited acquired 600 of these debentures Interest is payable on 31 st March and 30 th September Accruals are recognised in the legal entities accounts On 1 st May 2018, Brown Limited sold inventory to White Limited for $10,000, recording a before tax profit of $3,000 Half of these inventories were sold by White Limited to John at 30 th June 2018 On 1 st July 2018, Brown Limited sold a depreciable asset costing $10,000 to White Limited for $18,000 Brown Limited has not charged any depreciation on the asset before the sale Both entities depreciate assets at 10 per annum Required Prepare intragroup adjusting journal entries for the year ended 30 th June 2019 assuming an income tax rate of 20

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Posted on Jul 13, 2024

White Limited is the only shareholder of Brown Limited. Given below are independent intragroup transactions for the period ending 30^th June 2019.

During the year ending 30^th June 2019, Brown Limited sold inventory worth $50,000 to White Limited. Brown Limited made a profit after tax of $8,000. On 30^th June 2019, White Limited has sold 45% of these goods to Tony and 20% to Sam.

White Limited sold a depot to Brown Limited for $150,000. This had originally cost White Limited $120,000. The transaction took place on 1^st January 2017. Brown Limited charges depreciation at 5% per annum on a straight-line basis.

On 1^st June 2018, Brown Limited sold inventory costing $15,000 at a mark-up of 40% to White Limited. By 30^th June 2018, 30% of these inventories were sold to Jacob and the remaining 70% was sold on 2^nd July 2019 to Andrew.

On 1^st January 2018, White Limited sold inventory costing $10,000 to Brown Limited at a transfer price of $15,000. On 3^rd September 2018, Brown Limited sold half of these inventories back to White Limited, receiving $6,000 from White Limited. Of the remainder kept by Brown Limited, one-third was sold in March 2019 to Simran at a profit of $5,000.

On 1^st October 2018, White Limited issued 1,000 10% debentures of $100 at nominal value. Brown Limited acquired 600 of these debentures. Interest is payable on 31^st March and 30^th September. Accruals are recognised in the legal entities accounts.

On 1^st May 2018, Brown Limited sold inventory to White Limited for $10,000, recording a before-tax profit of $3,000. Half of these inventories were sold by White Limited to John at 30^th June 2018.

On 1^st July 2018, Brown Limited sold a depreciable asset costing $10,000 to White Limited for $18,000. Brown Limited has not charged any depreciation on the asset before the sale. Both entities depreciate assets at 10% per annum.

Required:

Prepare intragroup adjusting journal entries for the year ended 30^th June 2019 assuming an income tax rate of 20%.