Prepare the journal entries for the year ending

Assignment Help Accounting Basics
Reference no: EM132679637

Question - On 1 July 2014 Sunshine Ltd acquires a 25 per cent interest in Moonlight Ltd for a cash consideration of $440 000.

Additional information

For the year ending 30 June 2015, Moonlight Ltd records an after-tax profit of $80 000. A dividend of $50 000 is declared and ratified by Moonlight Ltd on 30 June 2015, with the dividend coming from profits earned in the 2014-15 financial year.

In October 2015 Moonlight Ltd pays the $50 000 dividends provided for on 30 June 2015.

For the year ending 30 June 2016, Moonlight Ltd records an after-tax loss of $20 000. On 30 June 2016 Moonlight Ltd declares dividends of $10 000, to be paid out of the profits earned in the 2015 financial year.

On 30 June 2016 Moonlight Ltd revalues its land upwards by an amount of $30 000.

Required - Prepare the journal entries for the year ending 30 June 2015 and 30 June 2016 to account for the investment in Moonlight Ltd assuming Sunshine Ltd is a NOT parent entity and use equity method.

Reference no: EM132679637

Questions Cloud

Describe strategy and strategic management process : Describe strategy and the strategic management process. Analyze the two levels of the environment. Explain resources and capabilities.
What are the main problems or challenges with the theory : What are the main problems or challenges with the theory?
Pass the necessary journal entry to record the acquisition : The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash. Pass the necessary journal entry to record the acquisition
Paula make against cash mart and geoffrey : What types of legal claims could Paula make against Cash Mart and Geoffrey? What are the possible tort claims that Paula can make against Cash Mart?
Prepare the journal entries for the year ending : Prepare the journal entries for the year ending 30 June 2015 and 30 June 2016 to account for the investment in Moonlight Ltd
Describe how this situation presents moral dilemma : Describe how this situation presents a moral dilemma. Identify the moral principles that are in conflict in this situation.
Calculating the initial value of goodwill : Goodwill reported for this acquisition is not impaired in 2019, but is impaired by $3,000 in 2020. Calculating the initial value of goodwill
Gaap regulations allow for variations in reporting financial : The GAAP regulations allow for variations in reporting financial data. What is the purpose of these options?
Organizational design as compared to modern : Analyze your organization against the four-quadrant model factors in organizational design as compared to (A) a modern,

Reviews

Write a Review

Accounting Basics Questions & Answers

  Calculate warner tool company breakeven point

Warner tool company produces class rins to sell to collegeand high school students. These rings sell for $75.00 each, andcost $35 each to produce. Warner tool company has fixed costs of $50,000. a) calculate warner tool company's breakeven point?

  Discuss the implications of the measures

Discuss the implications of the above measures and how they have succeeded to taming the shilling as well as reducing inflation

  What was the company cash flow to creditors during the year

The net working capital at the beginning of the year was $6,300 and it was $7,580 at the end of the year. What was the company's cash flow

  Discuss what is the profit from this customer

Using activity based methods, what is the profit from this customer

  Prepare the adjusting entry necessary

Prepare the adjusting entry necessary as a result of thephysical count. (b) Prepare closing entries.

  What amount should the company report of income tax expense

The enacted tax rate is 29% for 2011 and 39% after. What amount should the company report as the current portion of income tax expense for 2011

  Calculate the closing balance of the control account

Cash received from debtors during the period amounted to $3 000, then calculate the closing balance of the control account for accounts receivable

  Determining the total contribution margin for gliders

Explain whether either contest is desirable or not. Supplement your analysis by determining the total contribution margin for Gliders

  For each of the deferral adjustments prepare the initial

assume it is now december 31 2013 and nicole has just completed her first year of operations at nicoles getaway spa.

  Record the declaration of property dividend

Declared a property dividend of 100,000 shares of Slowdown Company (book value $11.20 per share, market value $9.60 per share).

  What amount of Lease Receivable does Larry Leasing record

The lease would require 7 annual payments paid at the beginning of each year. What amount of Lease Receivable does Larry Leasing record

  For what amount do you debit the equipment account

Your firm purchases equipment and you are given the following data: Cost $10,000. For what amount do you debit the Equipment account

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd