Question 5 Canon Ltd owns all the share capital of Brother Ltd. The income tax rate is 30%. During the period ended 30 June 2023, the following transactions took place: (a) Brother Ltd sold inventories costing $75 000 to Canon Ltd. Brother Ltd recorded a $15 000 profit before tax on these transactions. On 30 June 2023, Canon Ltd has none of these goods still on hand. (b) Canon Ltd sold inventories costing $12 000 to Brother Ltd for $27 000. By 30 June 2023, one-third of these were sold to Willow Ltd for $14 250 and one-third to Layla Ltd for $13 500; the rest are still on hand with Brother Ltd. Willow Ltd and Layla Ltd are external entities. (c) On 1 January 2023, Canon Ltd sold land for cash to Brother Ltd at $30 000 above cost. The land is still on hand with Brother Ltd. (d) Brother Ltd sold a warehouse to Canon Ltd for $150 000 on 1 July 2022. The carrying amount of this warehouse recognised by Brother Ltd at the time of sale was $123 000. Canon Ltd charges depreciation at a rate of 5% p.a. on cost. Q5 Required Prepare adjusting journal entries for the consolidation worksheet at 30 June 2023.

Question 5 Canon Ltd owns all the share capital of Brother Ltd. The income tax rate is 30%. During the period ended 30 June 2023, the following transactions took place: (a) Brother Ltd sold inventories costing $75 000 to Canon Ltd. Brother Ltd recorded a $15 000 profit before tax on these transactions. On 30 June 2023, Canon Ltd has none of these goods still on hand. (b) Canon Ltd sold inventories costing $12 000 to Brother Ltd for $27 000. By 30 June 2023, one-third of these were sold to Willow Ltd for $14 250 and one-third to Layla Ltd for $13 500; the rest are still on hand with Brother Ltd. Willow Ltd and Layla Ltd are external entities. (c) On 1 January 2023, Canon Ltd sold land for cash to Brother Ltd at $30 000 above cost. The land is still on hand with Brother Ltd. (d) Brother Ltd sold a warehouse to Canon Ltd for $150 000 on 1 July 2022. The carrying amount of this warehouse recognised by Brother Ltd at the time of sale was $123 000. Canon Ltd charges depreciation at a rate of 5% p.a. on cost. Q5 Required Prepare adjusting journal entries for the consolidation worksheet at 30 June 2023.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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