Question
Z Ltd is the parent entity of D Ltd. Assume the company income tax is 30%. The following intra-group transactions are relevant to the consolidation
Z Ltd is the parent entity of D Ltd. Assume the company income tax is 30%. The following intra-group transactions are relevant to the consolidation for the year ended 30 June 2018:
(a) D Ltd made inventory sales of $500 000 to Z Ltd during the year ended 30 June 2017. The original cost of this inventory to D Ltd was $400 000. Z Ltd had one-quarter of this inventory on hand at 30 June 2017.
(b) Z Ltd made inventory sales of $1 000 000 to D Ltd during the year ended 30 June 2018. The original cost of this inventory to Z Ltd was $500 000. D Ltd has one-half of this inventory on hand at 30 June 2018.
Required:
Prepare the consolidation journal entries for the Z Ltd economic entity at 30 June 2018 that is necessary in respect of these intra-group transactions and balances.
Step by Step Solution
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To eliminate the effects of the intragroup transactions and balances we need to make the following c...
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Accounting
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett
9th edition
1118608224, 1118608227, 730323994, 9780730323990, 730319172, 9780730319177, 978-1118608227
