On 5 June 2022, a parent entity sold inventories to a subsidiary entity for $80. The inventories had previously cost the parent entity $72. All the inventories are still held by the subsidiary at reporting date, 30 June 2022. Ignoring tax effects, the adjustment entry in the consolidation worksheet at reporting date is: a. O b. C. Sales revenue Cost of sales Inventories Cash Sales revenue Cost of sales Inventories Sales revenue Cost of sales Inventories d. Sales revenue Cash Inventories Cost of sales Dr Cr Cr Dr Cr Dr Cr Dr Cr Cr Dr Cr Dr Cr 80 000 72 000 72 000 80 000 72 000 72 000 8 000 72 000 72 000 72 000 72 000 8 000 72 000 72 000
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- During the year ended 30 June 2021, a parent entity rents a warehouse from a subsidiary entity for $200 000. The company tax rate is 30%. Which of the following is the consolidation adjustment entry needed at reporting date to eliminate the transaction? a. Rent revenue Dr 200 000 Rent expense Cr 200 000 b. Rent revenue Dr 200 000 Rent expense Cr 200 000 Income tax expense Dr 60 000 Deferred tax liability Cr 60 000 c. Rent revenue Dr 200 000 Rent expense Cr 200 000 Deferred tax asset Dr 60 000 Income tax expense Cr 60 000 d. Rent expense Dr 200 000 Rent revenue Cr 200 000 Answer (write your correct choice):During the year ended 30 June 2021, a parent entity rents a warehouse from a subsidiary entity for $200 000. The company tax rate is 30%. Which of the following is the consolidation adjustment entry needed at reporting date to eliminate the transaction? a. Rent revenue Dr 200 000 Rent expense Cr 200 000 b. Rent revenue Dr 200 000 Rent expense Cr 200 000 Income tax expense Dr 60 000 Deferred tax liability Cr 60 000 c. Rent revenue Dr 200 000 Rent expense Cr 200 000 Deferred tax asset Dr 60 000 Income tax expense Cr 60 000 d. Rent expense Dr 200 000 Rent revenue Cr 200 000In May 2017, o parent sold inventories to a subsiaiary entity for $50 000. The inventories had previously cost the parent entity $48 000. The entire inventory is still neld by the subsiaiary at reporting date, 30 June 2017. Ignoring tax effects, which of the following is the adjustment entry in the consolidation worksheet at reporting aate? Select one: a. Cost of sales Dr 60 000 Sales revenue Cr 12 000 Inventories Cr 48 000 b. Sales revenue Dr 48 000 Cash Cr 48 000 Inventories Dr 48 000 Cost of sales Cr 48 000 C. Cash Dr 48 000 Sales revenue Cr 48 000 Cost of sales Dr 48 000 Inventories Cr 48 000 d. Sales revenue Dr 60 000 Cost of sales Cr 48 000 Inventories Cr 12 000
- stan Itd sold inventories during the current period to its wholly owned susidiary. marcia Itd for $45000. These items previously cost stan Itd $37500. Marcia Itd subsequently sold half the items to an external entity for $27500. The remainder of the inventory was sold outside the group the following year. The tax Rate is 30%. required prepare the consolidation journal entries for the current and following yearPlease Assist in this question (a) During the current period SP Ltd sold inventory to its wholly owned subsidiary, Jaza Ltd, for $15 000. These items previously cost Sp Ltd $12 000. JazaLtd subsequently sold half the items to Nanjing Ltd for $8000. The tax rate is 30%. The group accountant for SP Ltd, Steve yu, maintains that the appropriate consolidation adjustment entries are as follows: Required (i) Discuss whether the entries suggested Steve Yu are correct, explaining on a line-by-line basis the correct adjustment entry. (ii)Determine the consolidation worksheet entries in the following year, assuming the inventory has been –sold, and explain the adjustments on a line-by-line basis. (b) On 1 July 2016 Henna Ltd sold an item of plant to Jordy Ltd for $450000 when its’ carrying value in Henna Ltd book was $600000 (costs $900000, accumulated depreciation $300000). This plant has a remaining useful life of five (5) years form the date of sale. The group measures its property plants and…(a) Jessica Ltd sold inventory during the current period to its wholly-owned subsidiary, Amelie Ltd, for $15 000. These items previously cost Jessica Ltd $12 000. Amelie Ltd subsequently sold half the items to Ningbo Ltd for $8000. The tax rate is 30%. The group accountant for Jessica Ltd, Li Chen, maintains that the appropriate consolidation adjustment entries are as follows:RequiredSalesCost of Sales InventoryDr15 000Cr 13 000 Cr 2 000DeferredTaxAsset Dr 300 Income Tax ExpenseCr 300(i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basis the correct adjustment entry.(ii)Determine the consolidation worksheet entries in the following year, assuming the inventory has been –sold, and explain the adjustments on a line-by-line basis. (b) On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000 when its’ carrying value in Liala Ltd book was $600000 (costs $900000, accumulated depreciation $300000). This plant has a remaining useful…
- Parent Co. owns 80% of Subsidiary Co. During 2021, Parent Co. sold goods with a 40% gross profit to Subsidiary Co. Subsidiary Co. sold all these goods in 2021. For 2021, consolidated financial statements, how should the summation of Parent Co. and Subsidiary Co.'s Income statement be adjusted? A. No adjustment is necessary. B. Sales and cost of goods sold should be reduced by 80% of the intercompany sales. C. Net income should be reduced by 80% of the gross profit on the intercompany sales. D. Sales and cost of goods sold should be reduced by the intercompany sales.Subject: Corporate Accounting Q) Jessica Ltd sold inventory during the current period to its wholly owned subsidiary, Amelie Ltd, for $15 000. These items previously cost Jessica Ltd $12 000. Amelie Ltd subsequently sold half the items to Ningbo Ltd for $8000. The tax rate is 30%. The group accountant for Jessica Ltd, Li Chen, maintains that the appropriate consolidation adjustment entries are as follows: (i) Sales.....Dr 15,000 Cost of Sales...Cr 13,000 Inventory..........Cr 2,000 (ii) Deferred Tax Asset...Dr 300 Income Tax Expense...Cr 300Required(i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basis the correct adjustment entry. (ii) Determine the consolidation worksheet entries in the following year, assuming the inventory has been –sold, and explain the adjustments on a line-by-line basis.Parent Company sells land with book value of P5,000 to Subsidiary Company for P6,000 in 2020. Subsidiary Company holds the land during 2021. Subsidiary Company sells the land for P8,000 to an outside entity in 2022. In 2020, the unrealized gain: A. Is initially included in the subsidiary’s accounts and must be eliminated from Parent Company’s income from Subsidiary Company under the cost method B. Is eliminated from consolidated net income by a working paper entry that includes a credit to the land account for P6,000 C. Is eliminated from consolidated net income by a working paper entry that includes a credit to the land account for P1,000 D. To be eliminated is affected by the non-controlling interest percentage
- a) Jessica Ltd sold inventory during the current period to its wholly owned subsidiary, Amelie Ltd, for $15 000. These items previously cost Jessica Ltd $12 000. Amelie Ltd subsequently sold half the items to Ningbo Ltd for $8000. The tax rate is 30%. The group accountant for Jessica Ltd, Li Chen, maintains that the appropriate consolidation adjustment entries are as follows:RequiredSalesCost of Sales InventoryDr15 000Cr 13 000 Cr 2 000DeferredTaxAsset Dr 300 Income Tax ExpenseCr 300(i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basis the correct adjustment entry. (2.5 marks)(ii)Determine the consolidation worksheet entries in the following year, assuming the inventory has been –sold, and explain the adjustments on a line-by-line basis. (b) On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000 when its’ carrying value in Liala Ltd book was $600000 (costs $900000, accumulated depreciation $300000). This plant has a…(a) Jessica Ltd sold inventory during the current period to its wholly owned subsidiary, Amelie Ltd, for $15 000. These items previously cost Jessica Ltd $12 000. Amelie Ltd subsequently sold half the items to Ningbo Ltd for $800. The tax rate is 30%. The group accountant for Jessica Ltd, Li Chen, maintains that the appropriate consolidation adjustment entries are as follows: Sales Dr15 000 Cost of Sales Cr 13 000 Inventory Cr 2 000 Deferred Tax Asset Dr 300 Income Tax Expensecr 300 Required 1) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basis the correct adjustment entry (1) Determine the consolidation worksheet entries in the following year, assuming the inventory has been -sold, and explain the adjustments on a line-by-line basis. (b) On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000 when its' carrying value in Liala Ltd book was $600000 (costs $900000, accumulated depreciation $300000). This plant has a remaining…(a) Jessica Ltd sold inventory during the current period to its wholly-owned subsidiary, Amelie Ltd, for $15 000. These items previously cost Jessica Ltd $12 000. Amelie Ltd subsequently sold half the items to Ningbo Ltd for $8000. The tax rate is 30%. The group accountant for Jessica Ltd, Li Chen, maintains that the appropriate consolidation adjustment entries are as follows:Required(i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basis the correct adjustment entry.