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Problem a) Briefly outline the principle for determining when the profit or loss on an intra-group transaction can be recognised by the group. Provide an example to demonstrate the principle.
Problem b) On 1 April 2008, Parent Lid commenced renting an office from its subsidiary at $500 per month. At 30 June 2008, Parent Lid owed one month of rent.
Required:
Prepare the adjusting journal entries required for the preparation of the consolidation worksheet at 30 June 2008.
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In the first sale, half of the non-cash assets were sold for ?15,000. How much did A and B receive in the first cash distribution?
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