During the year Freda Ltd sold inventory costing $80,000 for $100,000 on cost to Gwynne Ltd....

    

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During the year Freda Ltd sold inventory costing $80,000 for $100,000 on cost to Gwynne Ltd. At balance date Gwynne Ltd had 20% of this inventory still on hand. On 1 July 2019 Freda Ltd purchased machinery costing $90,000. This machinery had a useful life of 6 years. Freda Ltd sold this machinery for $78.000 on 1 July 2020 to Gwynne Ltd. This was being depreciated on a straight line basis for the remainder of its useful life. The useful life was unchanged on sale. Showing each part separately and assuming both companies pay tax at 30% prepare all journal entries necessary to account for the above intercompany transactions for the year ended 30 June 2021. During the year Freda Ltd sold inventory costing $80,000 for $100,000 on cost to Gwynne Ltd. At balance date Gwynne Ltd had 20% of this inventory still on hand. On 1 July 2019 Freda Ltd purchased machinery costing $90,000. This machinery had a useful life of 6 years. Freda Ltd sold this machinery for $78.000 on 1 July 2020 to Gwynne Ltd. This was being depreciated on a straight line basis for the remainder of its useful life. The useful life was unchanged on sale. Showing each part separately and assuming both companies pay tax at 30% prepare all journal entries necessary to account for the above intercompany transactions for the year ended 30 June 2021.

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To account for the intercompany transactions between Freda Ltd and Gwynne Ltd for the year ended 30 ... View the full answer