2. Explain WHY the entry is incorrect. Include formulas where possible in your explanation. Grape Ltd ($)
Question:
2. Explain WHY the entry is incorrect. Include formulas where possible in your explanation. Grape Ltd ($) 180000 -88000 92000 24000 8400 0 Duck Ltd ($) 131000 -58000 73000 0 0 25000 -8000 -32000 -8400 -15000 34600 10380 280000 -18000 0 262000 495000 Adjustments Sales revenue Cost of sales Gross profit Dividend revenue Rent revenue Proceeds from sale of land Dr ($) 55,000 28,000 44,000 1,400 25,000 1,600 120 2,100 280,000 495,000 Cr ($) 11,000 20,000 Depreciation -12000 Carrying amount of equipment sold Rent expense Other expenses Profit before tax Less: Income tax expense Retained earnings (1/7/20) Dividend paid Dividend declared Retained earnings (30/6/21) Share capital 0 -32000 80400 24120 72000 0 -26,000 46000 165000 32,000 1,400 13,200 2,400 18,000 2
Grape Ltd ($) General reserve 30000 BCVR 00 Duck Ltd ($) Adjustments Dr ($) Cr ($) 125000 125,000 65,000 26,000 2,100 44,000 8,000 940,000 1,600 120 Accounts payable Other Payables Dividend payable Deferred Tax liability Cash Accounts receivable Dividend receivable Other receivables Inventories Investment in Duck Ltd 737000 74120 26000 50000 25000 12000 52000 1400 45000 940000 38700 1400 0 11000 22600 12720 0 12000 22000 0 84000 78000 -26000 62000 -15000 25000 680000 Land 52000 Plant 60000 Acc'd depreciation -38000 Buildings 55000 Acc'd depreciation -20000 Goodwill 0 Deferred tax asset 0 7,000 65,000 13,200 2,400 Tip: Complete Part B and Part C first and then go back and find the errors
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta