account

Answer to Question 5
Consolidated Journal entries required to eliminate the above intragroup transactions for the year ended 30th June 2021.
    Particulars
    Amount (Dr)
    Amount (Dr)
    a) Answer to question (a) and (b)
Sales of inventory by P Ltd to S Ltd
Cost of sales (1,50,000 x 40%)
Inventory (50,000 x 40%)
To Purchases (2,00,000 x 40%)
Income tax expense (20,000 x 30%)
To Deferred Tax asset (20,000 x 30%)
    
$60,000
$20,000
$6000
    
$80,000
$6000
    b) Answer to question ( c)
Sale of equipment
Proceeds on sale of equipment
To Carrying amount
(2,00,000 – (2,00,000 x 10% x 2years))
To Equipment
Deferred Tax Asset (10,000 x 30%)
To Income tax expense
Accumulated Depreciation (2,00,000 x 10% x 2yrs)
To Depreciation exp
Income tax expense (40,000 x 30%)
To Deferred tax asset
    
$1,70,000
$3000
$40,000
$12,000
    
$1,60,000
$10,000
$3000
$40,000
$12,000
    c) Answer to question (d)
P Ltd paid dividend of $2000
Dividend Revenue ($2000 x 60% share)
To Dividend Paid
    
$1200
    
$1200
    d) Answer to question (e)
P Ltd borrowed...