charges depreciation at 5% p.a. on a straight-line basis. (f) In May 2019, a SYD sold inventories to MEL Ltd for $60 000. The inventories had previously cost the SYD entity $48 000. The entire inventory is still held by the MEL Ltd at reporting date, 30 June 2019. Ignoring tax effects, which of the following is the adjustment entry in the consolidation worksheet at reporting date? (g) SYD Ltd sold an item of plant to its subsidiary Mel Ltd on 1 January 2019 for $50 000. The asset had cost SYD Ltd $60 000 when acquired on 1 January 2015. At that time the useful life of the plant was assessed at 6 years. Rounded to the nearest dollar, the consolidation elimination entries at 30 June 2019 in relation to the sale of plant are which of the following?
Question 6: Intra-group transaction Question (worksheet
Sydney Ltd owns all of the shares of Mel Ltd. In relation to the following intragroup transactions, all parts of which are independent unless specified, prepare the consolidation worksheet adjusting entries for preparation of the consolidated financial statements as at 30 June 2019. Assume an income tax rate of 30%.
(a) SYD Ltd sold inventory to MEL Ltd on 1 September 2018 for $30 000. This inventory had cost SYD Ltd $18 000. One-third of the inventory was sold by Mel Ltd to QLD Ltd for $14 000 and one-third to ADL Ltd for $14 200.
(b) SYD Ltd manufactures certain items which it then markets through MEL Ltd. During the current period, SYD Ltd sold items for $20 000 to MEL Ltd at cost plus 20%. MEL Ltd has sold 75% of these transferred items at 30 June 2019.
(c) During June 2019, MEL Ltd declared a $3000 dividend. The dividend was paid in August 2020.
(d) In January 2019, MEL Ltd paid a $5 000 interim dividend.
(e) SYD Ltd sold a warehouse to MEL Ltd for $150 000. This had originally cost SYD Ltd $123 000. The transaction took place on 1 January 2018. MEL Ltd charges
(f) In May 2019, a SYD sold inventories to MEL Ltd for $60 000. The inventories had previously cost the SYD entity $48 000. The entire inventory is still held by the MEL Ltd at reporting date, 30 June 2019. Ignoring tax effects, which of the following is the adjustment entry in the consolidation worksheet at reporting date?
(g) SYD Ltd sold an item of plant to its subsidiary Mel Ltd on 1 January 2019 for $50 000. The asset had cost SYD Ltd $60 000 when acquired on 1 January 2015. At that time the useful life of the plant was assessed at 6 years. Rounded to the nearest dollar, the consolidation elimination entries at 30 June 2019 in relation to the sale of plant are which of the following?
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