On 1 January 2022, Toyboys Ltd acquired all the issued shares of Dragonfly Ltd. At that date, the plant of Dragonfly Ltd had a fair value of $10 000 more than its carrying amount and an estimated useful life of 5 years. Dragonfly Ltd depreciates the plant on a straight-line basis. The tax rate is 30%. How much will be the adjustment to be made against profit or loss in relation to this plant at 30 June 2023?

On 1 January 2022, Cow Ltd acquired all the issued shares in Green Ltd. At that date, the inventories of Green Ltd had a fair value of $20 000 LESS than their carrying amount. The inventories were sold during the year ended on 30 June 2023. The company tax rate is 30%.

Required

The tax effect entry to be made on 30 June 2023 in relation to the inventory will be?

On 1 January 2022, Toy Ltd acquired all the issued shares of Dragon Ltd. All the assets and liabilities of Dragon Ltd were recorded at amounts equal to their fair values at the acquisition date, except for the plant. The carrying amount of the plant was $97 000 and its fair value was $70 000. It was estimated that the plant had a further life of 5 years. Dragon Ltd depreciates the plant on a straight-line basis. The company tax rate is 30%.

Required:

What is the amount of adjustment required for the consolidated "Depreciation expense" at 30 June 2023?

Answer rating: 100% (QA)

1 Adjustment to Profit or Loss in relation to the plant at 30 June 2023 To determine the adjustment we need to calculate the annual depreciation expen... View the full answer