Intragroup%20Trans%202007 - Question 14(25 marks The X LTD Group was established on 1 January 20X0 as follows 80 X LTD Y LTD 60 Z LTD Details about

Intragroup%20Trans%202007 - Question 14(25 marks The X LTD...

This preview shows page 1 - 2 out of 5 pages.

1 Question 14 (25 marks) The X LTD Group was established on 1 January 20X0 as follows: 80% 60% X LTD Z LTD Y LTD Details about intra-group transactions and balances are set out below. 1. Sale of inventory from X to Z during 20X1 (3 marks) X made inventory sales of $1,500,000 to Z during 20X1. The original cost of this inventory to X was $1,200,000. Z has all of this inventory on hand at 31 December 20X1 and was sold during 20X2. 2. Sale of inventory from X to Z during 20X2 (5 marks) X made inventory sales of $2,000,000 to Z during 20X2. The original cost of this inventory to X was $1,200,000. Z still has half (50%) of this inventory on hand at 31 December 20X2. 3. Intercompany account (2 marks) The intercompany account between X and Z relating to Z’s unpaid inventory purchases from X is $500,000 as at 31 December 20X2. 4. Intercompany borrowings (3 marks) Y borrowed $1,000,000 from X on 1 January 20X1 repayable in full on 31 December 20X5. Interest on the borrowings is paid at the end of each calendar year at the rate of 8% p.a. 5. Management fee (2 marks) X charges Y an annual management fee of $50,000 that is paid on 1 January each year.
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read all 5 pages?

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes