Worksheet Extract Question:

Roadrunner Ltd acquired 80% of the shares of Coyote Ltd in 20X0 and obtained control. For the year ended June 30 20X5:

? Total sales for both companies amounted to $900 000. This amount included all intercompany sales. Total COGS was $500 000.

? Intercompany sales of inventory (three lots) totalled $190 000. All of this was still in Coyote inventories at year-end. The schedule below shows the original cost of the inventory to Roadrunner and transfer price between Roadrunner and Coyote of the three lots. Subsequent to purchase but before year-end Coyote recorded an impairment expense for two of the lots. This is also shown in the schedule along with the Net Realisable Value (NRV).

? Total inventory on hand for Roadrunner and Coyote as at 30 June 20X5 was $900 000.

Lot Original cost Transfer price 1 50 000 85 000 2 40 000 46 000 3 37 000 59 000 REQUIRED NRV 39 000 44 000 55 000 46 000 2 000 Impairment expense Complete the worksheet extract below to the extent possible using the available data. Consolidation worksheet 30 June 20X5 - extract income statement Cost of sales Inventory impairment expense Balance sheet Inventory Sum Eliminations Dr Cr Group