Left is a parent company that prepares consolidated financial statements. On 1 July 2021 Left Ltd acquired 40% of the equity in Right Ltd for $22o 000. At this date the equity in Right Ltd consisted of: Capital $250 000 Revaluation reserve $50 000 Retained profits $150 000 Right Ltd carried its assets fair values with the exception of one item of plant & equipment whose fair value was $20 000 greater than its carrying amount. The estimated useful life of this item is 4 years. Summary of movements in the retained earnings of Right Ltd: 2022 2023 Profit after tax 140 000 200 000 Retained profits at start Dividends 150 000 210 000 (80 000) 210 000 (100 000) 310 000 Retained profits at end At 30 June 2022 there were unrealised profits before tax of $10 000 arising from inventory transfers between the two entities. equired: Prepare the journal entries in the records of Left Ltd for the year ended 30 June 2023 in relation to its investment in Right Ltd.

Left is a parent company that prepares consolidated financial statements. On 1 July 2021 Left Ltd acquired 40% of the equity in Right Ltd for $22o 000. At this date the equity in Right Ltd consisted of: Capital $250 000 Revaluation reserve $50 000 Retained profits $150 000 Right Ltd carried its assets fair values with the exception of one item of plant & equipment whose fair value was $20 000 greater than its carrying amount. The estimated useful life of this item is 4 years. Summary of movements in the retained earnings of Right Ltd: 2022 2023 Profit after tax 140 000 200 000 Retained profits at start Dividends 150 000 210 000 (80 000) 210 000 (100 000) 310 000 Retained profits at end At 30 June 2022 there were unrealised profits before tax of $10 000 arising from inventory transfers between the two entities. equired: Prepare the journal entries in the records of Left Ltd for the year ended 30 June 2023 in relation to its investment in Right Ltd.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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