Subsidiary (Doe Ltd) Parent (Jane Ltd) Dr Inventory 12,000 Dr Inventory 15,000 Cr Cash 12,000 Cr Cash 15,000 Dr COGS 12,000 Dr Cash 24,000 Cr Inventory 12,000 Cr Sales Revenue 24,000 Dr Cash 15,000 Dr COGS 15,000 Cr Sales Revenue 15,000 Cr Inventory 15,000
Subsidiary Parent Sum Inventories - - - COGS 12,000 15,000 27,000 Sales Revenue 15,000 24,000 39,000 Cash 3,000 9,000 12,000 - - Journal entry: Dr Sales Revenue 15,000 or using the summary table: this equals all Cr COGS 15,000 or using the summary table: this is the bal c. Journal entry: Using summary table, the prior period entries (at 01/07/2020) were: Dr Sales 2,000 Cr Inventory 400 All the inventory is still on hand at this po Cr COGS 1,600 Dr DTA 120 Cr ITE 120 The inventory is sold in the period from 01/07/20 to 30/06/21. Thus, this period's tran Subsidiary (Doe Ltd) Parent (Jane Ltd) Dr Cash 2,500 Cr Sales Revenue 2,500 Dr COGS 2,000 Cr Inventory 2,000 Subsidiary Parent Sum Retained earnings 400 - 400 Inventories - - - COGS - 2,000 2,000 Sales Revenue - 2,500 2,500 - - This leaves us with an adjustment this period of: Dr Retained earnings 400 < - This is because in the prior period, we debit to sales of $2000 and a credit to
Cr COGS 400 Dr ITE 120 Cr Retained earnings 120 d. Land Subsidiary (Doe Ltd) Parent (Jane Ltd) 01/07/2019 Dr Cash 100,000 Dr Land 100,000 Cr Gain on sale of land 15,000 Cr Cash 100,000 Cr Land 85,000 Subsidiary Parent Sum Gain on sale 15,000 - 15,000 Land 100,000 100,000 - - - - Journal entry: At 30 June 2020, the adjusting entry was: Dr Gain on sale 15,000 Cr Land 15,000 Dr DTA 4,500 Cr ITE 4,500 Therefore, in this period, the adjusting entry is: Dr Retained earnings 10,500 Dr DTA 4,500 Cr Land 15,000 d. Machinery Subsidiary (Doe Ltd) Parent (Jane Ltd) 1-Jul-19 Dr Cash 40,000 Dr Machinery 40,000 Dr Loss on sale 8,000 Cr Cash 40,000 Dr Acc. Depreciation 32,000 Cr Machinery 80,000 debit to sales of $2000 and a credit to retained profits by $400 in the following pe the adjustments don't actually enter any l reta tment ----> ory is sold by s the balancing
Subsidiary Parent Sum Machinery - 40,000 40,000 Loss on sale 8,000 - 8,000 Accumulated depreciation - - - - - - Journal entry: At 1 July 2019, the adjusting entry was: Dr Machinery 40,000 Cr Acc. Depreciation 32,000 Cr Loss on sale 8,000 Dr ITE 2,400 Cr DTL 2,400 Therefore, in this period, the adjusting entry for the intragroup transfer of machinery Dr Machinery 40,000 Cr Acc. Depreciation 32,000 Cr Retained earnings 5,600 Cr DTL 2,400 Working out for the depreciation adjustment Doe Ltd (group) Jane Ltd CA at time of sale 48000 40000 Depreciation rate used 10% 10% Depreciation recognised 4800 4000 Thus, every year we must perform this journal entry: Dr Depreciation expense 800 Cr Acc. depreciation 800 To calculate the depreciation adjustment, we first fill in the table below to recognised for per annum depreciation if they had the asset. However, w applicable to the entity currently holding the asset (in this case, 10%) for b per-year depreciation to match the depreciation of the party that origi external party. In this case, we want to recognise Doe Ltd's depreciation of Thus, we adjust depreciation expense upwards by $800. For full explanatio
Dr DTL 240 Cr ITE 240 Since this is 30 June 2021, 2 years after the initial intragroup transaction, our deprecia Dr Depreciation expense 800 Dr RE (1.7.2020) 800 Cr Acc. Dep 1,600 Dr DTL 480 Cr ITE 240 Cr RE (1.7.2020) 240 e. Machinery Subsidiary (Doe Ltd) Parent (Jane Ltd) 01/07/2019 Dr Machinery 90,000 Dr Machinery 80,000 Cr Cash 90,000 Cr Cash 80,000 01/01/2021
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