Great Ltd owns all of the share capital of Barrier Ltd. The income tax rate is 30%. The following transactions took place during the periods ended 30 June 2020 or 30 June 2021. On 1 January 2020, Barrier Ltd lent Great Ltd the sum of $25 000. The loan is repayable in ten years and carries an annual interest charge of 4%. At 30 June 2021, both companies have recognized the interest for the year but no cash has been exchanged. In February 2021, Great Ltd sells inventories to Barrier Ltd for $11 000 in cash. These inventories had previously cost Great Ltd $8 000, and are on-sold externally on 2 April 2021. On 28 June 2021, Barrier Ltd declared a final dividend of $15 000. Shareholder approval is not required in relation to dividends. In March 2021, Great Ltd sold inventories for $15 000 to Zara Ltd, an external entity. These inventories were transferred from Barrier Ltd on 1 June 2020. The inventories had originally cost Barrier Ltd $4000, and were sold to Great Ltd for $11 000. On 1 April 2020, Barrier Ltd sold an item of plant to Great Ltd for $25 000, recording a before-tax profit of $4 000. Plant of this type is depreciated on a straight-line basis over a 4-year period. In July 2020, Great Ltd sells an item of machinery to Barrier Ltd for $12 000 in cash, Barrier Ltd treats the item as inventory. The machinery had previously cost Great Ltd $6 000, Barrier Ltd depreciates at a rate of 10% per annum at cost and the item is still on hand at 30 June 2021. Required In relation to the above intragroup transactions, prepare adjusting journal entries for the consolidation worksheet at 30 June 2021. Only the adjusting entries need be shown. Narrations are not required.
Great Ltd owns all of the share capital of Barrier Ltd. The income tax rate is 30%. The following transactions took place during the periods ended 30 June 2020 or 30 June 2021.
On 1 January 2020, Barrier Ltd lent Great Ltd the sum of $25 000. The loan is repayable in ten years and carries an annual interest charge of 4%. At 30 June 2021, both companies have recognized the interest for the year but no cash has been exchanged.
In February 2021, Great Ltd sells inventories to Barrier Ltd for $11 000 in cash. These inventories had previously cost Great Ltd $8 000, and are on-sold externally on 2 April 2021.
On 28 June 2021, Barrier Ltd declared a final dividend of $15 000. Shareholder approval is not required in relation to dividends.
In March 2021, Great Ltd sold inventories for $15 000 to Zara Ltd, an external entity. These inventories were transferred from Barrier Ltd on 1 June 2020. The inventories had originally cost Barrier Ltd $4000, and were sold to Great Ltd for $11 000.
On 1 April 2020, Barrier Ltd sold an item of plant to Great Ltd for $25 000, recording a before-tax profit of $4 000. Plant of this type is depreciated on a straight-line basis over a 4-year period.
In July 2020, Great Ltd sells an item of machinery to Barrier Ltd for $12 000 in cash, Barrier Ltd treats the item as inventory. The machinery had previously cost Great Ltd $6 000, Barrier Ltd
Required
In relation to the above intragroup transactions, prepare adjusting
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