On 1 July 2021, Safe Ltd acquired 100% of the shares of Mission Ltd for $500,000. On 1 July 2021, the equity of Mission Ltdconsisted of:Share capital $300,000 General reserve $60,000 Retained earnings $75,000All the identifiable assets and liabilities of Mission Ltd were recorded at fair value on 1 July 2021 except for: Carrying amount Fairvalue Inventories $ 90,000 $100,000 Plant (cost $300,000) $180,000 $200,000The above plant has a further 5-year life with nil residual value and is expected to be used evenly over that time.During the year ended 30 June 2022, all inventories on hand at 1 July 2021 are sold.Corporate tax rate is 30%.The following intragroup transactions take place after the acquisition:a) On 1 May 2022, Mission Ltd sells inventory costing $50,000 to Safe Ltd for $80,000. On 30 June 2022, only 70% of thesegoods have been sold by Safe Ltd. b) On 1 March 2023, Mission Ltd sells inventory to Safe Ltd costing $120,000 for $160,000.At 30 June 2023, 20% of this inventory is still held by Safe Ltd. c) On 1 January 2022, Safe Ltd sells a plant to Mission Ltd for$100,000. At the date of sale, Safe Ltd treats the plant as inventory and the plant has a carrying amount in the books of SafeLtd of $80,000. The plant is being depreciated on a straight-line basis at 10% p.a. on cost and still on hand in Mission Ltd'sbooks at 30 June 2023.d) Mission Ltd pays dividends for the period ended 30 June 2023.Financial information for the year ended 30 June 2023 includes the following:Safe LtdMission Ltd$360,000190,000Sales revenueDividend revenue63,000Other revenue40,00020,000Total revenue463,000210,000Cost of sales220,00060,000Other expensesSelling and administrative (including depreciation)Financial30,00010,00040,00020,000Total expensesProfit before taxIncome tax expenseProfit after tax290,00090,000173,00040,000120,00030,000133,00090,000Retained earnings 1/7/1460,000100,000193,000190,000Dividends paidRetained earnings 30/6/15(80,000)(63,000)113,000127,000Required:For the year ended 30 June 2023, prepare the pre-acquisition elimination entries.

Safe Ltd. acquired 100% shares of Mission Ltd. on 1st July 2021. Thus Mission Ltd. is a wholly owned…

Answered: Required: For the year ended 30 June…

Business

Accounting

Required: For the year ended 30 June 2023, prepare the pre-acquisition elimination entries.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Please don't answer in image format.. thanku
01. Martin owns land that is classified as PPE. The land has previously been valued at cost. The land will be revalued using the revaluation model to its fair value on December 31 (the company's year-end). Before revaluation, the land's carrying value was $100,000. The fair value is $125,000 as of December 31, 2021. What journal entry is required to record the revaluation? What entry would've been made if the fair value on December 31, 2022, is $90,000? 02. 1,000,000 of XYZ's no-par common shares were initially offered at a price of $13, Later, XYZ bought back 6,000 shares of these shares at $ 17 a share. XYZ is incorporated under the Canada business corporation Act and therefore retired these shares. Requirement Record the retirement of the shares. 03. ABC. declare a dividend of $100,000 and pays it all at once. Provide the journal entry needed to document the $100,000 dividend if: The dividend is paid in cash The dividend is paid in company stock (stock dividend)
Mawn Company bought and and built a warehouse during 2019. It improperly debited the following related costs to an account titled Land and Buildings: Prepare the correcting entries on December 31, 2019, to properly reclassify the preceding items.
Sheridan Company purchased a new plant asset on April 1, 2025, at a cost of $732,000. It was estimated to have a service life of 20 years and a salvage value of $60,000. Sheridan' accounting period is the calendar year.
Plant & Company plans to convert to IFRSs with a date of transition to IFRSs of 1 January 2X22. Under previous GAAP certain non-derivative financial assets have been derecognized from the statement of financial position in 2x20. Such financial assets would not have been derecognized if IFRSs had been applied at the time that they were derecognized. Select the best response. Plant & Company must recognize non-derivative financial assets that have been derecognized in accordance with previous GAAP in the opening IFRS statement of financial position if they did not qualify for derecognition under IFRSs. Plant & Company must never recognize non-derivative financial assets that have been derecognized in accordance with previous GAAP. Plant & Company must not recognize non-derivative financial assets that have been derecognized in accordance with previous GAAP unless they qualify for recognition as a result of a later transaction or event. Plant & Company must determine if the non-derivative…
What is the correct journal entry?
Based upon the provided information, how would I be able to calculate the Amortization of prior service costs and expected return on the plan assets? Additionally, would you be able to please help me understand what formula to use in these two calculations and why you use those. Thank you!
Concord Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials in 2026 at a cost of $1,024,100. At December 31, 2025, the raw materials to be purchased have a market value of $978,600. In 2026, Concord paid $1,024,100 to obtain the raw materials which were worth $978,600. Prepare the entry to record the purchase assuming the company uses a periodic inventory system. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit
P12.1B (L0 1,2,3,5) (Correct Intangible Asset Account) Dolphin Co., organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020 and 2021: Instructions 3/1/2020 3/1/2020 4/1/2020 6/30/2020 9/1/2020 12/31/2020 6/30/2021 9/1/2021 Intangible Assets 10-year franchise agreement; expires 2/28/28 Organization costsAdvance payment for 2 years for office space Purchased a patent (8-year life) Cost to develop a patent (10-year life) Net operating loss for 2020Research and development costsLegal fee to successfully defend internally developed patent $ 60,000 7,000 24,000 80,000 40,000 61,000 265,000 13,500 Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2021, recording any necessary amortization and reflecting all balances accurately as of that date. (Ignore…
Blossom Electric Inc. has the following amounts included in its general ledger at December 31, 2023: Organization costs Purchased trademarks Development phase activities (meet all six development phase criteria) Deposits with advertising agency for ads to promote goodwill of company Excess of cost over fair value of identifiable net assets of acquired subsidiary Cost of equipment acquired for research and development projects; the equipment has an alternative future use Costs of researching a secret formula for a product that is expected to be marketed for at least 20 years Payment for a favourable lease; lease term of 10 years $34,700 Total amount of intangible assets to be reported 18,500 31,500 7,700 81,100 125,300 75,900 14,900 (a) Based on the information provided, calculate the total amount for Blossom to report as intangible assets on its statement of financial position at December 31, 2023. Assume Blossom uses IFRS to prepare its financial statements.
How do you prepare the depreciation for the year 2026?
Using the information below for Baxter Corporation, prepare all necessary journal entries ONLY on December 31, 2021, 2022, and 2023. If no entry is needed, write “No entry.” (Dates are all correct!!) Show all computations below. • Baxter Corporation purchases a copyright in January 2020 for $500,000, incurring legal costs of $50,000. The copyright has a legal life of 25 years and an estimated useful life of 10 years. • In January 2022, Baxter successfully defended its copyright, incurring $75,000 in legal fees. The estimated useful life remains the same. • During 2023, based on new marketing research, Baxter determines that the fair value of the copyright is $400,000. Estimated total future cash flows from the copyright are $425,000. Record any impairment loss and adjusting entry on December 31, 2023. No change in estimated useful life.