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Parent Ltd owns 80% of Subsidiary Ltd

Accounting

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Parent Ltd owns 80% of Subsidiary Ltd. In the financial year ended 30 June 20X2, Subsidiary Ltd sold inventory to Parent Ltd. Details regarding the transaction are as follows:

Cost to Subsidiary to produce inventory

$7000

Sale price of inventory to Parent Ltd.

$11000

Percentage of inventory still held by Parent Ltd at 30 June 20X2

20%

Percentage of inventory still held by Parent Ltd at 30 June 20X3

0%

Tax rate

30%

 

Round all your answers to the nearest dollar amount. If you believe no journal entry is required, select NULL for the account name, NA for the Dr or Cr, and enter 0 for the amount. Do not leave the amount blank.

Do not enter dollar ($) signs or commas (i.e. enter 10000 not $10,000).

Required:

(i) Prepare any necessary journal entries in the consolidation journal to eliminate this transaction for the year ended 30 June 20X2.

 (ii) Prepare any necessary journal entries in the consolidation journal to eliminate this transaction for the year ended 30 June 20X3.

 (iii) Prepare any necessary journal entries in the consolidation journal to adjust the Non-Controlling Interests (NCI) allocation for the year ended 30 June 20X3.