Intra group Transactions Kent Ltd owns all the share capital of Lodh Ltd. That is, Lodh Ltd is a wholly own subsidiary of Kent Ltd. Required: In relation to the following intra-group transactions, prepare the consolidation worksheet adjusting entries for the preparation of consolidated financial statements as at 30 June 2021. All parts are independent unless specified. Assume an income tax rate of 30% and that all income on sale of assets is taxable and expenses are deductible. a. On 1 July 2020, Kent Ltd sold an item of plant costing $25 000 to Lodh Ltd for $28 000. PIA Ltd had not charged any depreciation on the plant before the sale. Both entities depreciate assets at 10% p.a. on cost.

Intra group Transactions Kent Ltd owns all the share capital of Lodh Ltd. That is, Lodh Ltd is a wholly own subsidiary of Kent Ltd. Required: In relation to the following intra-group transactions, prepare the consolidation worksheet adjusting entries for the preparation of consolidated financial statements as at 30 June 2021. All parts are independent unless specified. Assume an income tax rate of 30% and that all income on sale of assets is taxable and expenses are deductible. a. On 1 July 2020, Kent Ltd sold an item of plant costing $25 000 to Lodh Ltd for $28 000. PIA Ltd had not charged any depreciation on the plant before the sale. Both entities depreciate assets at 10% p.a. on cost.

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Chapter13: Comparative Forms Of Doing Business

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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

Intra group Transactions

Kent Ltd owns all the share capital of Lodh Ltd. That is, Lodh Ltd is a wholly own subsidiary of Kent Ltd.

Required:

In relation to the following intra-group transactions, prepare the consolidation worksheet adjusting entries for the preparation of consolidated financial statements as at 30 June 2021. All parts are independent unless specified. Assume an income tax rate of 30% and that all income on sale of assets is taxable and expenses are deductible.

a. On 1 July 2020, Kent Ltd sold an item of plant costing $25 000 to Lodh Ltd for $28 000. PIA Ltd had not charged any depreciation on the plant before the sale. Both entities depreciate assets at 10% p.a. on cost.

Definition Definition Entries made at the end of every accounting period to precisely replicate the expenses and revenue of the current period. This is also known as end of period adjustment. It can also refer to financial reporting that corrects errors made previously in the accounting period. Every adjustment entry affects at least one real account and one nominal account.

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