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Show the relevant consolidated journal entries for the year

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Reference no: EM132918993

Dune Ltd owns 100 per cent of the shares of Farm Ltd, acquired on 1 July 2019 for $712,000 when the shareholders' funds of Farm Ltd were:

Share capital             $400,000
Retained earnings         $360,000
                                  $760,000

  • All assets of Farm Ltd are fairly stated at the acquisition date.
  • During the 2020 financial year, Farm Ltd sells inventory to Dune Ltd at a sales price of $66,000. The inventory cost Farm Ltd $56,000 to produce.
  • During the 2020 financial year, Dune Ltd sold a plant to Farm Ltd for $30,000. This had a carrying amount to Dune Ltd of $24,000. Both entities depreciate plant at a rate of 10% per annum on cost.
  • Farm Ltd paid $70,000 in dividend to Dune Ltd.
  • Farm Ltd paid $52,000 in management fees to Dune Ltd.
  • The tax rate is 30 per cent.

Problem 1: Show the relevant consolidated journal entries for the year ended 30 June, 2020 (including tax impacts)

Reference no: EM132918993

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