Use the information provided in question one alongside the provided information below, to record the journal entries for the given years.

Profit and dividends for the year ended 30^th of June 2013 to 2017 were as follows:

 

Year	Profit/( loss) $	Dividends  $	OCI	Transfer to general reserves
2016	(300000)	40000	14000	5000
2017	(80000)	20000	4000	5000
2018	110000	10000	9000	0
2019	300000	50000	24000	0

 

Retained earnings were as follows:

 

Year	Beginning 1/7/2015	Ending 30/6/2016
2016	161000	(184000)
2017	(184000)	(289000)
2018	(289000)	(189000)
2019	(189000)	61000

 

Other information

 

1. In September, 2016, Liverpool Ltd sold inventory to Alma Ltd with a profit before tax of $ 20000. One-third of this inventory was sold by Alma Ltd at Augest, 2017, and the rest was sold at September, 2018.
2. In February 2018, Alma Ltd sold inventory to Liverpool Ltd with a profit After tax of $14000. Only half of this inventory was sold by Liverpool Ltd to external party during June, 2018. The rest were sold during 2019.
3. In September 2018, Liverpool Ltd sold inventory to Alma Ltd for $ 20000, it was cost Liverpool Ltd $ 5000.  this inventory remained unsold at 30 June 2019.
4. On 1 July,  2017, Alma Ltd sold an item of Machinery to Liverpool Ltd with a profit before tax of $30000 This item had a future 10 years life. The machinery was sold to external party at the 30^th of March,2019.During 2017, the Liverpool started to use double declining balance method to depreciate its PPE.

 

Required

Prepare journal entries in the records of Sarah Ltd for each of the years ended 30 June 2016 to 2019 in relation to its investment in the associate/joint venture, Madison Ltd. (Assume Liverpool prepare consolidated financial statements.)

Answer rating: 100% (QA)

2016 DR Retained Earnings 161000 CR Investment in Madison Ltd 161000 2017 ... View the full answer