Hills Inc. acquired subsidiary X for 550 ($,000) in 20X2 and also bought Property, plant and equipment for 350($,000).Note: Figures are in ($,000)Additional Notes;1.It was found out that Hills proceeds from sale of equipment was 20,000 and they also received a dividend of 200,000 and Interest of 200,000.2.Hill Inc paid lease liabilities of 90,0003.Had proceeds from Long-term borrowings of 250,000.4. In May of 20x2 they paid dividend of 1200Required:Prepare the Consolidated Cash Flow Statement for Hills Inc. using Indirect Method. Hills Inc. acquired subsidiary X for 550 ($,000) in 20X2 and also bought Property, plant andequipment for 350($,000).Hills Inc. Consolidated statement of comprehensive income for the period ended 20X2SalesCost of salesGross profitDepreciationAdministrative and selling expensesInterest expenseInvestment incomeForeign exchange lossProfit before taxationTaxes on incomeProfit(a) The entity did not recognize any components of other comprehensive income in the period ended 20X2Hills Inc. Consolidated statement of financial position as at end of 20X2AssetsCash and cash equivalentsAccounts receivableInventoryPortfolio investmentsProperty, plant and equipment netTotal assets30,650(26,000)4,650(450)(910)(400)500(40)LiabilitiesTrade payablesInterest payableIncome taxes payableLong-term debt3,350(300)3,050 (a)20X12301,9001,0002,5002,2807,9102502304002,30020X21601,2001,9502,5008506,6601,8901001,0001,040 Total liabilitiesShareholders' equityShare capitalRetained earningsTotal shareholders' equityTotal liabilities and shareholders' equity3,1801,5003,2304,7307,9104,0301,2501,3802,6306,660

The Hills Inc. consolidated cash flow statement for the period ended December 31, 20X2, prepared…

Hills Inc. acquired subsidiary X for 550 ($,000) in 20X2 and also bought Property, plant and equipment for 350($,000). Note: Figures are in ($,000) Additional Notes; 1.It was found out that Hills proceeds from sale of equipment was 20,000 and they also received a dividend of 200,000 and Interest of 200,000. 2.Hill Inc paid lease liabilities of 90,000 3.Had proceeds from Long-term borrowings of 250,000. 4. In May of 20x2 they paid dividend of 1200 Required: Prepare the Consolidated Cash Flow Statement for Hills Inc. using Indirect Method.

Hills Inc. acquired subsidiary X for 550 ($,000) in 20X2 and also bought Property, plant and equipment for 350($,000). Note: Figures are in ($,000) Additional Notes; 1.It was found out that Hills proceeds from sale of equipment was 20,000 and they also received a dividend of 200,000 and Interest of 200,000. 2.Hill Inc paid lease liabilities of 90,000 3.Had proceeds from Long-term borrowings of 250,000. 4. In May of 20x2 they paid dividend of 1200 Required: Prepare the Consolidated Cash Flow Statement for Hills Inc. using Indirect Method.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter16: Multistate Corporate Taxation

Section: Chapter Questions

Problem 34P

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a) Jessica Ltd sold inventory during the current period to its wholly owned subsidiary, Amelie Ltd, for $15 000. These items previously cost Jessica Ltd $12 000. Amelie Ltd subsequently sold half the items to Ningbo Ltd for $8000. The tax rate is 30%. The group accountant for Jessica Ltd, Li Chen, maintains that the appropriate consolidation adjustment entries are as follows: Sales Dr 15000Cost of Sales Cr 13000Inventory Cr 2000Deferred Tax Asset Dr 300Income Tax Expense Cr 300Required(i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basis the correct adjustment entry. (ii) Determine the consolidation worksheet entries in the following year, assuming the inventory has been –sold, and explain the adjustments on a line-by-line basis. (b) On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000 when its’ carrying value in Liala Ltd book was $600000 (costs $900000, accumulated depreciation $300000). This plant has a remaining…
(a) Jessica Ltd sold inventory during the current period to its wholly owned subsidiary, Amelie Ltd, for $15 000. These items previously cost Jessica Ltd $12 000. Amelie Ltd subsequently sold half the items to Ningbo Ltd for $8000. The tax rate is 30%. The group accountant for Jessica Ltd, Li Chen, maintains that the appropriate consolidation adjustment entries are as follows: Sales Dr 15 000 Cost of Sales Cr 13 000 Inventory Cr 2 000 Deferred Tax Asset Dr 300 Income Tax Expense Cr 300 Required (i) Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basis the correct adjustment entry. (ii) Determine the consolidation worksheet entries in the following year, assuming the inventory has been —sold, and explain the adjustments on a line-by-line basis.