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Calculate new ltd share of profit for the year ended june

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Reference no: EM133187732

Question - New LTD acquired 25% interest in YORK LTD on 1 July 2018 for $350.000. the equity of York LTD at the acquisition date consisted of the share capital of R$ 3.000.000 and retained earnings of $400.00. All the identifiable net assets of York LTD on 1 July were recorded at fair value. For the year ended 30 Jun 2020. York LTD recorded an after-tax profit of $650.000. The following inter-entity transaction occurred between New LTD and York LTD.

1. On 1 January 2020, New LTD sold a building costing RS504.000 to York LTD for RS522.000 York applied a depreciation rate of 2% per annum on the cost of the building.

2. On 1 August 2019, York LDT sold inventory to new LTD for R$165.000. The original cost was RS150.000. New LTD sold 15% of this inventory externally by 30 June 2020, for R$80.000

3. On 14 June, Yor LTD sold inventory to new LTD at a profit of $11.000 before tax. On 30 June 2019. This inventory remains unsold. New LTD sold this entries inventory to external parties for R$87.000 on 28 April 2020.

New LTD applies AASB 128/IAS 28 in accounting for its investment in York, accounting for its investments in York LTD and does not prepare consolidated financial statements. The rate is 30%

1. Calculate New LTD share of profit for the year ended 30 June 2020. Show all working.

2. Prepare the Journal entry to record the share of profit to new LTD narrations is unnecessary.

Reference no: EM133187732

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