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Financial Reporting Module 6 Part B

Financial reporting pre webinar questions

Shark Tale

Shark Ltd acquired 80% of Dolphin Ltd on 1 January 20X1.
For the year ended 30 June 20X1, Dolphin sold inventory to Shark Ltd for $20,000. The cost of the inventory was $5,000

a) All the inventory was on hand at year end on 30 June 20X1.
b) 30% of the inventory was on hand at 30 June 20X1
c) 70% of the inventory was sold by 30 June 20X1. During the year that ended 30 June 20X2 all the inventory was sold to external parties.

The tax rate applicable is 30%

  1. What are the journal entries for each of these three scenarios?
    financial reporting shark

Snakes and Ladders

Snakes Ltd acquired 80% of the shares in Ladders Ltd on 1 January 20X1. This gave it control over Ladders Ltd.
On the 1 January 20X2 Ladders sold a truck carrying an amount of 30,000 to Snakes Ltd. for $50,000
According to Ladders Ltd, the truck had a remaining useful life of 8 years but Snakes is going to depreciate the truck over a useful life of 10 years.

  1. What is the consolidation elimination journals on 31 December 20X2?
  2. What is the consolidation elimination journals on 31 December 20X3?
    financial reporting snake
    Try attempting these questions prior to the Financial Reporting Module 6 Part B webinar. We’ll be tackling them in more detail during the webinar.Want to try our resources before you buy? Sign up to CPA Assist for Financial Reporting and get 10 hours of free content across selected modules.
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February 20, 2017

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