Pearl Limited acquired 100% of the issued capital of Silver Limited on 1 July 2010, for $90,000. At the date the shareholders’ equity of Silver Limited was: Share capital $60,000 Reserves $20,000 Retained Earnings $10,000 During the year ended 30 June 2012 Silver Ltd sold inventory worth $15,000 to Pearl Ltd, and Pearl Ltd sold inventory work $5,000 to Silver Ltd. Unrealised profit on closing inventory at 30 June 2012 was $1,000. There was inter-company interest of $5,600 for the year ended 30 June 2012. Required: Journal entries to eliminate the investment in Silver Ltd by Pearl Ltd. Journal entries to eliminate any inter-company transactions at 30 June 2012. Complete the worksheet.
Pearl Limited acquired 100% of the issued capital of Silver Limited on 1 July 2010, for $90,000. At the date the shareholders’ equity of Silver Limited was: Share capital $60,000 Reserves $20,000 Retained Earnings $10,000 During the year ended 30 June 2012 Silver Ltd sold inventory worth $15,000 to Pearl Ltd, and Pearl Ltd sold inventory work $5,000 to Silver Ltd. Unrealised profit on closing inventory at 30 June 2012 was $1,000. There was inter-company interest of $5,600 for the year ended 30 June 2012. Required: Journal entries to eliminate the investment in Silver Ltd by Pearl Ltd. Journal entries to eliminate any inter-company transactions at 30 June 2012. Complete the worksheet.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Pearl Limited acquired 100% of the issued capital of Silver Limited on 1 July 2010, for $90,000.
At the date the shareholders’ equity of Silver Limited was:
|
Share capital |
$60,000 |
|
Reserves |
$20,000 |
|
|
$10,000 |
During the year ended 30 June 2012 Silver Ltd sold inventory worth $15,000 to Pearl Ltd, and Pearl Ltd sold inventory work $5,000 to Silver Ltd.
Unrealised profit on closing inventory at 30 June 2012 was $1,000.
There was inter-company interest of $5,600 for the year ended 30 June 2012.
Required:
Journal entries to eliminate the investment in Silver Ltd by Pearl Ltd.- Journal entries to eliminate any inter-company transactions at 30 June 2012.
- Complete the worksheet.
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