Zhang Ltd is the wholly owned subsidiary of Lang Ltd. The following transactions occur between the...

Transcribed Image Text:

Zhang Ltd is the wholly owned subsidiary of Lang Ltd. The following transactions occur between the two entities during the financial year ending 31 January 2021: a) In 2020, Zhang Ltd sold Lang Ltd goods, which cost $40,000 for $60,000. At 31 January 2021, Lang Ltd. had not sold 40% of these goods. (3 marks) b) In 2019, Lang Ltd sold Zhang Ltd goods, which cost $35,000 for $50,000. At 31 January 2021, Zhang Ltd. had not sold 20% of these goods. (3 marks) Required: Assuming a tax rate of 30%, provide consolidation adjustment entries for the above inter-entity transactions to enable preparation of the consolidated report for the year ending 31 January 2021. Zhang Ltd is the wholly owned subsidiary of Lang Ltd. The following transactions occur between the two entities during the financial year ending 31 January 2021: a) In 2020, Zhang Ltd sold Lang Ltd goods, which cost $40,000 for $60,000. At 31 January 2021, Lang Ltd. had not sold 40% of these goods. (3 marks) b) In 2019, Lang Ltd sold Zhang Ltd goods, which cost $35,000 for $50,000. At 31 January 2021, Zhang Ltd. had not sold 20% of these goods. (3 marks) Required: Assuming a tax rate of 30%, provide consolidation adjustment entries for the above inter-entity transactions to enable preparation of the consolidated report for the year ending 31 January 2021.

Answer rating: 100% (QA)

To prepare the consolidation adjustment entries for the interentity transactions between Zhang Ltd a... View the full answer