On 1t July 2021 Jensen Ltd acquired 80% of the issued shares of Interceptor Ltd for $315,200. The equity of Interceptor Ltd at that date comprised: Share capital (250,000 ordinary shares) Retained earnings General reserve $250,000 49,375 100,000 The assets and liabilities of Interceptor Ltd were all valued at fair value except for: Fair value Carrying amount $230,000 125,000 81,250 Land Machinery (cost $187,500) Inventory $250,000 150,000 100,000 Additional information The machinery, which a remaining life of 5 years, was sold on 14 July 2022 for $175,000. All the inventory held at 1" July 2021 was sold in the year after acquisition. All valuation adjustments were made by consolidation worksheet journal entries. Interceptor Ltd had the following transactions during the years to 30th June 2022 and 30th June 2023. 2022 January 17 Paid an interim dividend $10,000. $5,000 being funded out of pre-acquisition profits. Sold inventory to Jensen Ltd with a sale price of $62,500 at a pre-tax profit of $12,500. 23 Declared a final dividend of $18,750. 30 Half of the inventory sold to Jensen Ltd on April 1st was still on hand. 30 Profit for the year amounted to $162,500. 12 Paid the final dividend declared in June. April 1 June August 2023 January Sold equipment costing $25,000 to Jensen Ltd for $37,500. This attracts a 1 straight-line depreciation rate of 20%. 17 Paid an interim dividend $20,000 23 Transferred $25,000 from the general reserve balance at 1 July 2021 to retained earnings 30 Profit for the year amounted to $187,500. June It is group policy to account for dividends upon declaration. Assume a tax rate of 30%. Required Prepare the adjusting consolidation worksheet journal entries for the years ended 30th June 2022 and 30h June 2023.
On 1t July 2021 Jensen Ltd acquired 80% of the issued shares of Interceptor Ltd for $315,200. The equity of Interceptor Ltd at that date comprised: Share capital (250,000 ordinary shares) Retained earnings General reserve $250,000 49,375 100,000 The assets and liabilities of Interceptor Ltd were all valued at fair value except for: Fair value Carrying amount $230,000 125,000 81,250 Land Machinery (cost $187,500) Inventory $250,000 150,000 100,000 Additional information The machinery, which a remaining life of 5 years, was sold on 14 July 2022 for $175,000. All the inventory held at 1" July 2021 was sold in the year after acquisition. All valuation adjustments were made by consolidation worksheet journal entries. Interceptor Ltd had the following transactions during the years to 30th June 2022 and 30th June 2023. 2022 January 17 Paid an interim dividend $10,000. $5,000 being funded out of pre-acquisition profits. Sold inventory to Jensen Ltd with a sale price of $62,500 at a pre-tax profit of $12,500. 23 Declared a final dividend of $18,750. 30 Half of the inventory sold to Jensen Ltd on April 1st was still on hand. 30 Profit for the year amounted to $162,500. 12 Paid the final dividend declared in June. April 1 June August 2023 January Sold equipment costing $25,000 to Jensen Ltd for $37,500. This attracts a 1 straight-line depreciation rate of 20%. 17 Paid an interim dividend $20,000 23 Transferred $25,000 from the general reserve balance at 1 July 2021 to retained earnings 30 Profit for the year amounted to $187,500. June It is group policy to account for dividends upon declaration. Assume a tax rate of 30%. Required Prepare the adjusting consolidation worksheet journal entries for the years ended 30th June 2022 and 30h June 2023.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On 1t July 2021 Jensen Ltd acquired 80% of the issued shares of Interceptor Ltd for $315,200. The equity of
Interceptor Ltd at that date comprised:
Share capital (250,000 ordinary shares)
Retained earnings
General reserve
$250,000
49,375
100,000
The assets and liabilities of Interceptor Ltd were all valued at fair value except for:
Carrying
amount
Fair
value
Land
Machinery (cost $187,500)
Inventory
$230,000
125,000
81,250
$250,000
150,000
100,000
Additional information
The machinery, which a remaining life of 5 years, was sold on 1" July 2022 for $175,000.
All the inventory held at 1t July 2021 was sold in the year after acquisition.
All valuation adjustments were made by consolidation worksheet journal entries.
Interceptor Ltd had the following transactions during the years to 30th June 2022 and 30h June 2023.
2022
January
17 Paid an interim dividend $10,000. $5,000 being funded out of pre-acquisition
profits.
Sold inventory to Jensen Ltd with a sale price of $62,500 at a pre-tax profit of
1 $12,500.
23 Declared a final dividend of $18,750.
30 Half of the inventory sold to Jensen Ltd on April 1st was still on hand.
30 Profit for the year amounted to $162,500.
12 Paid the final dividend declared in June.
April
June
August
2023
January
Sold equipment costing $25,000 to Jensen Ltd for $37,500. This attracts a
1 straight-line depreciation rate of 20%.
17 Paid an interim dividend $20,000
23 Transferred $25,000 from the general reserve balance at 1s July 2021 to
retained earnings
30 Profit for the year amounted to $187,500.
June
It is group policy to account for dividends upon declaration. Assume a tax rate of 30%.
Required
Prepare the adjusting consolidation worksheet journal entries for the years ended 30th June 2022 and 30th
June 2023.
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