Prepare journal entries in the records of brown ltd

Reference no: EM132894736

Exercise

Adjustments where investor prepares and does not prepare consolidated financial statements

Brown Ltd acquired a 30% interest in Bandicoot Ltd for $50 ?000 cash on 1 July 2018. The di- rectors of Brown Ltd believe this investment represents significant influence over the investee. The equity of Bandicoot Ltd at the acquisition date was as follows.

All the identifiable assets and liabilities of Bandicoot Ltd were recorded at fair value. Profits and dividends for the years ended 30 June 2019 to 2021 were as follows.

1. Prepare journal entries in the records of Brown Ltd for each of the years ended 30 June 2019 to 2021 in relation to its investment in the associate, Bandicoot Ltd. (Assume Brown Ltd does not prepare consolidated financial statements.)

2. Prepare the consolidation worksheet entries to account for Brown Ltd's interest in the as- sociate/joint venture, Bandicoot Ltd. (Assume Brown Ltd does prepare consolidated finan- cial statements.)

3. Calculate the carrying amount of the investment in Bandicoot Ltd at 30 June 2021.

Reference no: EM132894736

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