You will need to use Excel or Word to answer this question and then upload your...

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You will need to use Excel or Word to answer this question and then upload your file. Please ensure that you leave yourself enough time to upload your file responses. It is recommended that you upload your file as you complete a file response question PART A - Accounting for investments in associates and joint ventures Colombia Ltd has a 40% interest in an associate, Bogota Ltd, in which it invested $780,000 on 1 July 2020. The equity of Bogota Ltd at the acquisition date was: Share capital Retained earnings $1,400,000 520,000 All the identifiable assets and liabilities of Bogota Ltd were recorded at amounts equal to their fair values, except for: Carrying amount Fair value Remaining useful life Plant (cost $770,000) $462,000 $465,000 6 years Profits, income tax expense and dividends for the years ended 30 June 2021, 2022 and 2023 were as follows: Profit before tax 2021 2022 $31,000 Income tax expense $9,000 Dividends paid $12,000 ($7,000) $7,000 2023 $47,000 $12,000 Bogota Ltd does not prepare consolidated financial statements. The following independent transactions have occurred between the two entities: Bogota Ltd does not prepare consolidated financial statements. The following independent transactions have occurred between the two entities: •In May 2021, Bogota Ltd sold inventory to Colombia Ltd for $15,000. This inventory had previously cost Bogota Ltd $12,000 and remains unsold by Colombia Ltd at the end of the period. This inventory was all sold in July 2021. • On 1 July 2021, Colombia Ltd sold machinery to Bogota Ltd, at a gain of $4,000. The remaining useful life of the asset is 4 years. In February 2022, Colombia Ltd sold inventory to Bogota Ltd at a before-tax profit of $6,000. Half of this was sold by Bogota Ltd before 30 June 2022. • In June 2023 Colombia Ltd had invoiced Bogota Ltd $17,000 for consulting work completed in May. Bogota Ltd had paid the invoice in full by the end of June 2023. Required: Prepare the acquisition analysis and journal entries of Colombia Ltd's investment in its associate Bogota Ltd for the years ended 30 June 2020 and 30 June 2021. Show all workings. (9 marks) PART B - Foreign currency transactions Ajax Ltd, an Australian company, purchased inventory from Jiff Ltd, US company. The following information is relevant to a recent acquisition of inventory for US$300,000 pursuant to a contract with terms including FOB shipping*. Date 08-06-2023 Event Inventory shipped Inventory delivered Exchange rate AUD$1 = USD 0.70 AUD$1 = USD 0.75 30-06-2023 AUD$1 = USD 0.69 20-08-2023 Cash payment of US$300,000 to Jiff Ltd AUD$1 = USD 0.66 24-06-2023 End of reporting period *FOB shipping is when ownership passes to the purchaser upon goods being loaded onto the shipping vessel Required: In accordance with AASB 121, prepare all of the entries of Ajax Ltd that relate to the foreign currency purchase of inventory. Show all workings and round to the nearest dollar. (6 marks) You will need to use Excel or Word to answer this question and then upload your file. Please ensure that you leave yourself enough time to upload your file responses. It is recommended that you upload your file as you complete a file response question PART A - Accounting for investments in associates and joint ventures Colombia Ltd has a 40% interest in an associate, Bogota Ltd, in which it invested $780,000 on 1 July 2020. The equity of Bogota Ltd at the acquisition date was: Share capital Retained earnings $1,400,000 520,000 All the identifiable assets and liabilities of Bogota Ltd were recorded at amounts equal to their fair values, except for: Carrying amount Fair value Remaining useful life Plant (cost $770,000) $462,000 $465,000 6 years Profits, income tax expense and dividends for the years ended 30 June 2021, 2022 and 2023 were as follows: Profit before tax 2021 2022 $31,000 Income tax expense $9,000 Dividends paid $12,000 ($7,000) $7,000 2023 $47,000 $12,000 Bogota Ltd does not prepare consolidated financial statements. The following independent transactions have occurred between the two entities: Bogota Ltd does not prepare consolidated financial statements. The following independent transactions have occurred between the two entities: •In May 2021, Bogota Ltd sold inventory to Colombia Ltd for $15,000. This inventory had previously cost Bogota Ltd $12,000 and remains unsold by Colombia Ltd at the end of the period. This inventory was all sold in July 2021. • On 1 July 2021, Colombia Ltd sold machinery to Bogota Ltd, at a gain of $4,000. The remaining useful life of the asset is 4 years. In February 2022, Colombia Ltd sold inventory to Bogota Ltd at a before-tax profit of $6,000. Half of this was sold by Bogota Ltd before 30 June 2022. • In June 2023 Colombia Ltd had invoiced Bogota Ltd $17,000 for consulting work completed in May. Bogota Ltd had paid the invoice in full by the end of June 2023. Required: Prepare the acquisition analysis and journal entries of Colombia Ltd's investment in its associate Bogota Ltd for the years ended 30 June 2020 and 30 June 2021. Show all workings. (9 marks) PART B - Foreign currency transactions Ajax Ltd, an Australian company, purchased inventory from Jiff Ltd, US company. The following information is relevant to a recent acquisition of inventory for US$300,000 pursuant to a contract with terms including FOB shipping*. Date 08-06-2023 Event Inventory shipped Inventory delivered Exchange rate AUD$1 = USD 0.70 AUD$1 = USD 0.75 30-06-2023 AUD$1 = USD 0.69 20-08-2023 Cash payment of US$300,000 to Jiff Ltd AUD$1 = USD 0.66 24-06-2023 End of reporting period *FOB shipping is when ownership passes to the purchaser upon goods being loaded onto the shipping vessel Required: In accordance with AASB 121, prepare all of the entries of Ajax Ltd that relate to the foreign currency purchase of inventory. Show all workings and round to the nearest dollar. (6 marks)

Answer rating: 100% (QA)

PART A Accounting for investments in associates and joint ventures Acquisition analysis Cost of 40 interest in Bogota Ltd 780000Equity of Bogota Ltd a... View the full answer