B Limited sells inventory to its parent, W Limited at cost price plus 125% mark-up.  • Closing inventories in the records of W Limited on 30 June 2022 amount to R157 500. • Net realisable value of inventory on hand in the books of W limited amounts to  R107 500 on 30 June 2022.  • Ignore tax implications Show how the pro forma journal entry/ies would be in the books of W Limited  Group as of 30 June 2022, assuming that W Limited did not recognise the write down to net realisable value in its individual records

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

B Limited sells inventory to its parent, W Limited at cost price plus 125% mark-up. 
• Closing inventories in the records of W Limited on 30 June 2022 amount to R157 500.
• Net realisable value of inventory on hand in the books of W limited amounts to 
R107 500 on 30 June 2022. 
• Ignore tax implications

Show how the pro forma journal entry/ies would be in the books of W Limited 
Group as of 30 June 2022, assuming that W Limited did not recognise the write down to net realisable value in its individual records

Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Accounting Policies, Changes in Accounting Estimates and Errors
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education