Abra Ltd sold an item of plant to its subsidiary Cadabra Ltd on 1 July 2017 for $50 000. The asset had cost Abra Ltd $60 000 when acquired on 1 January 2015. At that time the useful life of the plant was assessed at 6 years. Which of the following entries is needed to account for the transaction in the consolidation elimination entries at 30 June 2018? Tax rate is 30%. Select one: O a. O b. C. O d. Dr Cr Dr Cr Dr Cr Dr Cr Gain on sale of plant Plant Plant Gain on sale of plant Income tax expense Deferred tax liability Gain on sale of plant Plant 15,000 10,000 3,000 10,000 15,000 10,000 3,000 10,000
Abra Ltd sold an item of plant to its subsidiary Cadabra Ltd on 1 July 2017 for $50 000. The asset had cost Abra Ltd $60 000 when acquired on 1 January 2015. At that time the useful life of the plant was assessed at 6 years. Which of the following entries is needed to account for the transaction in the consolidation elimination entries at 30 June 2018? Tax rate is 30%. Select one: O a. O b. C. O d. Dr Cr Dr Cr Dr Cr Dr Cr Gain on sale of plant Plant Plant Gain on sale of plant Income tax expense Deferred tax liability Gain on sale of plant Plant 15,000 10,000 3,000 10,000 15,000 10,000 3,000 10,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Abra Ltd sold an item of plant to its subsidiary Cadabra Ltd on 1 July 2017 for $50 000. The asset had cost Abra Ltd $60 000 when acquired on 1 January 2015.
At that time the useful life of the plant was assessed at 6 years. Which of the following entries is needed to account for the transaction in the consolidation
elimination entries at 30 June 2018? Tax rate is 30%.
Select one:
O a.
O b.
O d.
Dr
Cr
Dr
Cr
Dr
Cr
Dr
Cr
Gain on sale of plant
Plant
Plant
Gain on sale of plant
Income tax expense
Deferred tax liability
Gain on sale of plant
Plant
15,000
10,000
3,000
10,000
15,000
10,000
3,000
10,000
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