Abra Ltd sold an item of plant to its subsidiary Cadabra Ltd on 1 January 2017 for
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Question:
Abra Ltd sold an item of plant to its subsidiary Cadabra Ltd on 1 January 2017 for $50 000. The asset had cost Abra Ltd $60 000 when acquired on 1 January 2015. At that time the useful life of the plant was assessed at 6 years. Which of the following entries is needed to account for the transaction in the consolidation elimination entries?
a. Dr Plant 10000, Cr Gain of sale 10000
b. Dr Gain on sale of plant 15000, Cr Plant 15000
c. Dr Income Tax expense 3000, Cr Deferred tax liability 3000
d. Dr Gain on Sale of plant 10000, Cr Plant 10000
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