Black Limited sells inventory to its parent, White Limited at cost price plus 125% mark-up. • Closing inventories in the records of White Limited on 30 June 2022 amount to R157 500. Net realisable value of inventory on hand in the books of While limited amounts to R107 500 on 30 June 2022. • Ignore tax implications Required 1.1 Clearly illustrate how write-down of inventory will be with regard to the above information, showing inventory at selling price, value according to the group, net realisable value, write-down in White Limited's records, Unrealised profit from the group's perspective and additional elimination of unrealised profit required through pro forma consolidation journal. 1.2 Show how the journal entry would be recorded in the books of White Limited on 30 June 2022 in accordance with IAS 2. And also show pro forma consolidation journal for the group. 1.3 Show how the pro forma journal entry/ies would be in the books of White Limited Group as of 30 June 2022, assuming that White Limited did not recognise the write- down to net realisable value in its individual records

Black Limited sells inventory to its parent, White Limited at cost price plus 125% mark-up. • Closing inventories in the records of White Limited on 30 June 2022 amount to R157 500. Net realisable value of inventory on hand in the books of While limited amounts to R107 500 on 30 June 2022. • Ignore tax implications Required 1.1 Clearly illustrate how write-down of inventory will be with regard to the above information, showing inventory at selling price, value according to the group, net realisable value, write-down in White Limited's records, Unrealised profit from the group's perspective and additional elimination of unrealised profit required through pro forma consolidation journal. 1.2 Show how the journal entry would be recorded in the books of White Limited on 30 June 2022 in accordance with IAS 2. And also show pro forma consolidation journal for the group. 1.3 Show how the pro forma journal entry/ies would be in the books of White Limited Group as of 30 June 2022, assuming that White 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

See similar textbooks

Similar questions

During 2022, Emerald Inc. decided to change from FIFO method of inventory valuation to the weighted average method. January 1 inventory under FIFO 7,100,000 January 1 inventory under weighted average 7,700,000 December 31 inventory under FIFO 7,900,000 December 31inventory under weighted average 8,300,000 What is the effect on January 1, 2022 inventory and on Retained Earnings? (A) no effect B January 1, 2022 inventory understated and Retained Earnings understated January 1, 2022 inventory understated and Retained Earnings overstated January 1, 2022 inventory overstated and Retained Earnings overstated
Please do not give solution in image format and show all calculation thanku
Please do not give solution in image format thanku
11.The inventory account of Papaya Company at December 31, 2021 has a balance of P1,800,000 and was found to include the following items:*Goods purchased in transit, FOB shipping point, P130,000*Goods held on consignment, P56,000*Goods out on approval, at sales price of P32,500 (cost is P25,000)What is the correct amount of inventory at December 31, 2021?
Crane Ltd. had the following items in inventory as at December 31, 2024: Item No. Quantity Unit Cost NRV དྷྭ སྒྲ སཱུ སྦ 340 $4.00 $4.30 370 3.00 2.90 380 8.00 9.00 400 7.00 6.80 Assume that Crane uses a perpetual inventory system. Fill in the table below for the lower of cost and net realizable value per unit, the inventory dollar amount at the lower of cost and net realizable value, and the dollar amount of the inventory at cost. ntity Unit Cost NRV Unit LC & NRV 340 $4.00 $4.30 S 370 3.00 2.90 Dollar LC & NRV 4.00 $ 2.90 1360 1073 380 8.00 9.00 8.00 3040 400 7.00 6.80 6.80 2720 Dollar Cost 1360 1110 3040 2800 $ 8193 $ 8310 Prepare any necessary adjusting entry at December 31, 2024. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry) Account Titles Debit Credit
Sunland Corporation had the following items in inventory as at December 31, 2023: Item No. A1 84 C2 D3 (a) Quantity 4 120 110 190 120 Inventory 1 Unit Cost $3.20 Inventory 1.70 8.50 7.50 Your answer is partially correct. Assume that Sunland uses a periodic inventory system, and that none of the inventory items can be grouped together for accounti purposes. The opening inventory on January 1, 2023, was $3,200 in total. Account Titles and Explanation Allowance to Reduce Inventory to NRV NRV $3.80 1.10 Prepare the year-end adjusting entries required to adjust to the lower of cost or net realizable value using the direct method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts. List all debit entries before credit entries.) 10.30 7.10 (To transfer out beginning inventory balance) Allowance to Reduce Inventory to NRV (To record ending inventory at…
During 2022, Emerald Inc. decided to change from FIFO method of inventory valuation to the weighted average method. January 1 inventory under FIFO 7,100,000 January 1 inventory under weighted average 7,700,000 December 31 inventory under FIFO 7,900,000 December 31inventory under weighted average 8,300,000 In the statement of retained earnings for 2022, what amount should be reported as the pretax cumulative effect of this accounting change? (A) 1,000,000 deduction (B) 1,000,000 addition C 600,000 deduction D 600,000 addition
Star Company recognized $500 of cost of goods sold. Note that Star is only recording the cost of goods sold part of the transaction and not the sales revenue. Star uses the perpetual inventory system. Which of the following answers reflects the effect of recognizing the cost of goods sold on the financial statements? Balance Sheet Income Statement Assets = A. 500 B. (500) C. (500) D. (500) Multiple Choice O O оо Liabilities + - Option B Option A Option C Option D (500) Stockholders' Equity 500 (500) n/a (500) Revenue n/a n/a n/a n/a - Expense 500 500 500 n/a Net Income (500) (500) (500) n/a Statement of Cash Flows n/a n/a 500 Operating Activity n/a
Qq.12. Subject :- Account
(3) The company "ALPHA" started operations on 01/06/202X. The transactions of buying and selling inventories are shown in the table below: You are asked (a) to display your inventory account statement based on the methods of: FIFO, Weighted average price, with continuous inventory (b) analyze the impact of each method on the balance sheet (statement of financial position) and profit and loss statement figures. 01/06/202X Initial inventory 400 units 0,80€ 09/07/202X Market 1600 0,83€ 10/08/202X Sale- export 1800 21/09/202X Market 1500 0,84€ 25/10/202X Sale – export 1500 29/11/202X Market 1300 0,85€ 20/12/202X Sale-export 1100
8. Banana Company uses the retail method of inventory valuation. The following information is available:Beginning inventory: P186,196 at cost; P302,250 at retailPurchases: P703,740 at cost; P1,120,000 at retailFreight in: P12,400Purchase discounts: P14,400Purchase returns: P25,050 at cost; P48,300 at retailNet additional markups – P100,000 Net markdowns – P205,000Sales revenue – P900,000What is the estimated cost of the ending inventory using FIFO retail? a. 368,950 b. 258,265 c. 250,886 d. 258,625
Oo1. Subject :- Account