Accounting Problem solving

(f)
Dr Group sales $92000 Cr Group Purchases $92000
Dr Sarina income statement $6000 Cr Group inventory $6000
Unrealized profit = ½*12000
(g)
No entry is made for this transaction since the year 2017-18 is not affected as the unrealized profit is now realized
(h)
Dr Group sales $60000 Cr Group Purchases $60000
(i)
Dr Consolidated income statement $35000 Cr Group PPE $35000
Unrealized profit = selling price –book value
$116000-$81000=$35000
Dr Accumulated depreciation $7000 Cr Subsidiary income statement $7000
Depreciation for 5 years according to group’s point of view
$81000/5=$16200
Depreciation for 5 years according to subsidiary’s point of view
$116000/5= 23200
(j)
No entry made for this transaction as it does not affect the group accounts
(k)
Inventory account
Dr -Hahndorf-Sarina $40000
$50000 Cr -Unrealized profit
-balance carried forward $6000
$84000
(l)
Others assets account
Dr Other assets –H
-S $600000
$726000 Cr -unrealized profit (CIS)
-accumulated depreciation
-balance carried forward $35000
$7000
$1284000
(m)
Controlling interest account
Dr Price paid $700000 Cr Share capital
General reserve
Retained earnings
Goodwill $500000
$80000
$30000
$90000
Consolidated worksheet
Item Hahndorf ltd Sarina ltd Consolidated totals
Sales revenue $1000000 $800000 $1648000 (F &h)
Cost of sales (600000) (600000) (1048000)
Gross profit 600000
Divided from Sarina 10000 10000
Management fee received 26500 26500
Admin expenses 55800 28700 84500
Depreciation 29500 56800 79300 (i)
Management fee paid 26500 26500
Other expenses 306200 8000 314200
Profit before tax 132000-60000(f)
126000
Tax expense 30000 24000 54000
Profit for the period 72000
Retained earnings at 1/7/2017 230000 120000-30000(pre-acquisition retained earnings) 320000
392000
Dividend paid 20000 20000
Dividend declared 40000 40000
Retained earnings at 30/6/2018 332000
Share capital 900000 900000
General reserve 60000 60000
Total equity 1292000
Dividend payable 40000 40000
Other liabilities 120000 30000 150000
Total equity and liabilities 1482000
Goodwill 90000 90000
Dividends receivable 20000 20000
Inventory 84000(k)
Sundry adjustments 4000
Other assets 1284000 (l)
Total assets 1482000
References STATEMENTS, C.

F. (2009). Consolidated Financial Statements.Taylor, P. (1996). Consolidated financial reporting. SAGE.