Grandview Ltd acquired 100%% of the issued capital of Electro Ltd on 1 July 2021 for $110,000 At that date the shareholders' equity of Electro Ltd was: Share Capital General Reserves Retained Earnings $60,000 15,000 16,000 During the year ended 30 June 2021: Electro Ltd sold goods to Grandview Ltd for 70,000 and unrealised profit in closing inventory of Grandview Ltd was $6,000. During the year Electro Ltd paid an interim dividend of $4,000 and at 30June 2021 they provided for a final dividend of $6,000. No impairment of goodwill occurred. Required: (a) Journal entries to eliminate the investment in Electro Ltd by Grandview Ltd. (b) Journal entries to eliminate any other inter-company transactions.

Grandview Ltd acquired 100%% of the issued capital of Electro Ltd on 1 July 2021 for $110,000 At that date the shareholders' equity of Electro Ltd was: Share Capital General Reserves Retained Earnings $60,000 15,000 16,000 During the year ended 30 June 2021: Electro Ltd sold goods to Grandview Ltd for 70,000 and unrealised profit in closing inventory of Grandview Ltd was $6,000. During the year Electro Ltd paid an interim dividend of $4,000 and at 30June 2021 they provided for a final dividend of $6,000. No impairment of goodwill occurred. Required: (a) Journal entries to eliminate the investment in Electro Ltd by Grandview Ltd. (b) Journal entries to eliminate any other inter-company transactions.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

Grandview Ltd acquired 100% of the issued capital of Electro Ltd on 1 July 2021 for $110,000
At that date the shareholders' equity of Electro Ltd was:
Share Capital
General Reserves
Retained Earnings 16,000
S60,000
15,000
During the year ended 30 June 2021:
Electro Ltd sold goods to Grandview Ltd for 70,000 and unrealised profit in closing inventory of
Grandview Ltd was $6,000,
During the year Electro Ltd paid an interim dividend of $4,000 and at 30June 2021 they
provided for a final dividend of $6,000.
No impairment of goodwill occurred.
Required:
(a) Journal entries to eliminate the investment in Electro Ltd by Grandview Ltd.
(b) Journal entries to eliminate any other inter-company transactions.

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