Reference no: EM132545579
Question 1 - XYZ Limited is a subsidiary of ABC Limited. The following transactions took between them during the month of March:
1st-XYZ Limited paid rent $1000 to ABCLimited for the month of March.
2nd-XYZ Limited declared a dividend of $1,500 to ABC Limited.
13th-XYZ Limited paid the dividend to ABC Limited declared on 2ndMarch.
14th-ABC Limited lends $10,000 to XYZ Limited paying interest at 10% every month.
15th-ABC Ltd issues 10$100 debentures with an interest rate of 15% p.a. payable on 15 March of each year to XYZ Limited.
Required - Provide consolidation worksheet adjusting entries for each of the transactions listed above.
Question 2 - Why is it necessary to make adjustments for intragroup transactions?
Question 3 - Where an intragroup transaction involves a depreciable asset, why is depreciation expense adjusted?