May Ltd acquired 100 per cent of the shares of June Ltd for $50 000. At...

     

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May Ltd acquired 100 per cent of the shares of June Ltd for $50 000. At that date the equity of the two entities was as follows: May Ltd June Ltd Share capital (ordinary shares) $ 50,000 $ 26,000 Asset revaluation surplus $ 25,000 $ 4,000 Retained earnings $ 14,500 $ 2,800 At 1 July 2020, all the identifiable assets and liabilities of June Ltd were recorded at value except for the following: Inventories Carrying amount $3 000 $60 000 $3.500 $61 000 Plant and equipment (cost $80,000) i All of the inventories acquired were sold by December 2020. The plant and equipment had a further 5-year useful life. June Ltd also had a patent that had been internally generated that was valued at $20,000. ii May Ltd records dividend receivable as revenue when dividends are declared. During the year June Ltd paid an interim dividend of $1,000 and declared a final dividend of $1,200. iii The beginning inventories of June Ltd at 1 July 2021 included unrealised profit of $250 for goods purchased May Ltd. All of this inventory has been sold to parties external to the group by the end of the current financial year. iv During the year, May Ltd sold inventory to June Ltd for $2,200. This inventory cost May Ltd $1,000. At the end of the current year, June Ltd was still holding 20% of this inventory. ii May Ltd records dividend receivable as revenue when dividends are declared. During the year June Ltd paid an interim dividend of $1,000 and declared a final dividend of $1,200. iii The beginning inventories of June Ltd at 1 July 2021 included unrealised profit of $250 for goods purchased May Ltd. All of this inventory has been sold to parties external to the group by the end of the current financial year. iv During the year, May Ltd sold inventory to June Ltd for $2,200. This inventory cost May Ltd $1,000. At the end of the current year, June Ltd was still holding 20% of this inventory. V On 31 December 2021, June Ltd sold May Ltd office furniture for $1,500. This furniture originally cost June Ltd $1,500. The carrying amount at the sale date was $1,250. May Ltd depreciates furniture at the rate of 10% p.a. on cost. vi The company tax Required ght BF is 30 per cent. Prepare all necessary consolidation journal entries, including any related income tax entries, as at 30 June 2022 according to the requirements of AASB 10 Consolidated Financial Statements. [Total for Question 2 - 30 marks] ast May Ltd acquired 100 per cent of the shares of June Ltd for $50 000. At that date the equity of the two entities was as follows: May Ltd June Ltd Share capital (ordinary shares) $ 50,000 $ 26,000 Asset revaluation surplus $ 25,000 $ 4,000 Retained earnings $ 14,500 $ 2,800 At 1 July 2020, all the identifiable assets and liabilities of June Ltd were recorded at value except for the following: Inventories Carrying amount $3 000 $60 000 $3.500 $61 000 Plant and equipment (cost $80,000) i All of the inventories acquired were sold by December 2020. The plant and equipment had a further 5-year useful life. June Ltd also had a patent that had been internally generated that was valued at $20,000. ii May Ltd records dividend receivable as revenue when dividends are declared. During the year June Ltd paid an interim dividend of $1,000 and declared a final dividend of $1,200. iii The beginning inventories of June Ltd at 1 July 2021 included unrealised profit of $250 for goods purchased May Ltd. All of this inventory has been sold to parties external to the group by the end of the current financial year. iv During the year, May Ltd sold inventory to June Ltd for $2,200. This inventory cost May Ltd $1,000. At the end of the current year, June Ltd was still holding 20% of this inventory. ii May Ltd records dividend receivable as revenue when dividends are declared. During the year June Ltd paid an interim dividend of $1,000 and declared a final dividend of $1,200. iii The beginning inventories of June Ltd at 1 July 2021 included unrealised profit of $250 for goods purchased May Ltd. All of this inventory has been sold to parties external to the group by the end of the current financial year. iv During the year, May Ltd sold inventory to June Ltd for $2,200. This inventory cost May Ltd $1,000. At the end of the current year, June Ltd was still holding 20% of this inventory. V On 31 December 2021, June Ltd sold May Ltd office furniture for $1,500. This furniture originally cost June Ltd $1,500. The carrying amount at the sale date was $1,250. May Ltd depreciates furniture at the rate of 10% p.a. on cost. vi The company tax Required ght BF is 30 per cent. Prepare all necessary consolidation journal entries, including any related income tax entries, as at 30 June 2022 according to the requirements of AASB 10 Consolidated Financial Statements. [Total for Question 2 - 30 marks] ast

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