Andy Ltd acquires 100% interest in Irons Ltd. On 1 July 2013 Andy Ltd sells an...
Andy Ltd acquires 100% interest in Irons Ltd. On 1 July 2013 Andy Ltd sells an item of plant to Irons Ltd for $145 000 when its’ carrying value in Andy Ltd’s accounts was $101 250 (cost $168 750, accumulated depreciation $67 500). This plant is assessed as having a remaining useful life of 6 years and the tax rate is 30%. Required: [use the space provided below] Provide consolidation journal entries for 30 June 2014 and 30 June 2015 to adjust for the above sale.
Homework Answers
total unrealized profit for andy ltd., is 145000 - 101250 = 43750
JOURNAL ENTRIES IN THE BOOKS OF ANDY LTD.,
30 JUNE 2014
p&l a/c of iron ltd., Dr 43750
To plant a/c 43750
depreciation a/c (43750/6) Dr 16875
To plant a/c 16875
30 JUNE 2015
depreciation a/c (43750/6) Dr 16875
To plant a/c 16875
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