User Account

All Pages

Find what rules for the elimination entry for intra-group

Assignment Help Financial Accounting
Reference no: EM132659984

On 1 July 2018, Sunflower Ltd acquired 90% of the share capital to gain control of Palm Ltd. The following intra-group transactions occurred during the year ending 30 June 2019.

(i) During the 2018 - 2019 period, Sunflower Ltd sold inventory to Palm Ltd for $1600,000. Sunflower Ltd purchased this inventory at $1000,000. By 30 June 2019, Palm Ltd has sold 70% of that inventory to third party.

(ii) Palm Ltd declared a final dividend of $1300, 000 from current year's profits.

(iii) Palm Ltd paid Sunflower Ltd, a fee for administrative services they provided of $40,000.

(iv) Palm Ltd has an intra-group loan with Sunflower Ltd. Sunflower Ltd provided a loan of $10,000,000. The loan charges 4% interest annually. One half of the interest for the current year remains unpaid at 30 June 2019.

(v) Palm Ltd sold a land to Sunflower Ltd for $560000. The land was purchased by Palm Ltd at $ 300000.

Required:

Problem (a) Prepare the journal entries required to eliminate the intra-group transactions above.

Problem (b) When are profits realised in relation to inventory transfers within the group?

Problem (c) What are the rules for the elimination entry for intra-group transactions relating to dividend declared by the parent company and dividend declared by the subsidiary company?

Reference no: EM132659984

Questions Cloud

How does living in a society affect morality : Reflect on the central questions as related to the branch of ethics. What is the "right thing to do"?
Calculate Edith realized gain or loss : Edith, a calendar year taxpayer, receives insurance proceeds of $525,000 in January 2020. Calculate Edith's realized gain or loss
What is the maximum amount perfume division would be : Excess capacity and can sell everything produced externally. What is the maximum amount Perfume Division would be willing to pay for the bottles?
What is Mitchell recognized gain : Suppose he invests the $625,000 condemnation proceeds in the stock market on June 30. What is Mitchell's recognized gain
Find what rules for the elimination entry for intra-group : Find What are the rules for the elimination entry for intra-group transactions relating to dividend declared by the parent company and dividend declared
Explain why critical thinking is so important : Explain why critical thinking is so important and what benefits will it provide to a specific area in your life.
Determine the tax consequences to Albert : Albert owns 100 acres of land on which he grows spruce trees. Determine the tax consequences to Albert of the Condemnation proceeds
Difference between depression and unhappiness : According to Dalrymple, what is the fundamental difference between "depression" and "unhappiness"? Are you persuaded by his argument?
What the budgeted gross profit for the month of october is : What the budgeted gross profit for the month of October is? Of the total sales, 40% is on credit which the company collects in the month following the month

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd