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Q) (a)Liala ltd acquired all the issued shares of Jordan ltd on 1 January 2015. The following transactions occured between the two entities:
(1) On 1 June 2016, Liala ltd sold inventory to Jordan ltd for $12,000, this inventory previously costed Liala ltd $10,000. By 30 June 2016, Jordan ltd had sold 20% of this inventory to other entities for $3,000. The other 80% was all sold to external entities by 30 June 2017 for $13,000.
(2) During the 2016-2017 period, Jordan ltd sold inventory to Liala ltd for $6,000, this being at cost plus 20% mark-up. Of this inventory, 20% remained on hand in Liala ltd at 30 June 2017. The tax rate is 30%.
Required:
(i) Prepare the consolidation worksheet entries for Liala ltd at 30 June 2017 in relation to the intragroup transfers of inventory.
(ii) Compute the amount of cost of goods sold to be reported in the consolidated income statement for 2017 relating to the relevant intra-group sales.
(b) On 1 July 2016, Liala ltd sold an item of plant to Jordan ltd for $150,000 when its carrying value in Liala ltd book was $200,000(costs $300,000,
Required:
Prepare the necessary
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- Problems 19 and 20 are based on the following information.The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are as follows:Additional Information:• On December 31, 2017, Patrick acquired 100 percent of Sean’s voting stock in exchange for $460,000.• At the acquisition date, the fair values of Sean’s assets and liabilities equaled their carrying amounts, respectively, except that the fair value of certain items in Sean’s inventory were $25,000 more than their carrying amounts.In the December 31, 2017, consolidated balance sheet of Patrick and its subsidiary, what amount of total assets should be reported?a. $1,375,000b. $1,395,000c. $1,520,000d. $1,980,000arrow_forwardPetunia Company acquired an 80% interest in Shaman Company in 2016. In 2017 and 2018, Shaman reported net income of $400,000 and $480,000, respectively. During 2017, Shaman sold $80,000 of merchandise $20,000 profit. Petunia sold the merchandise to outsiders during 2018 for $140,000. to Petunia For consolidation for a purposes, what is the noncontrolling interest's share of Shaman's 2017 and 2018 net income?arrow_forwardCASE 1 Presented below are the financial balances for the BonGiovi Company and the Terens Company as of December 31, 2017, immediately before BonGiovi acquired Terens. Also included are the fair values for Terens Company's net assets at that date (thousands of US$). Terens Compute consolidated retained earnings as a result of this acquisition. A) $1,160. Compute consolidated revenues immediately following the acquisition. BonGiovi Book Value Terens Book Value B) $1,170. 31.12.2017 31.12.2017 Fair Value 31.12.2017 C) $1,265. Cash 870 240 240 Receivables 660 600 600 D) $1,280. Inventory 1,230 420 580 Land 1,800 260 250 E) $1,650. Buildings (Net) 1,800 540 650 Equipment (net) 660 380 400 Accounts Payable (570) (240) (240) Accrued expenses (270) (60) Long term Liabilities (2,700) (1,020) (60) (1,120) Common Stock (1,980) A) $3,540. ($20par) B) $2,880. Common Stock ($5 (420) par) C) $1,170. Additional paid in (210) (180) capital D) $1,650. Retained earnings (1,170) (480) Revenue (2,880)…arrow_forward
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