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FAC2602 ASSIGNMENT 2 SOLUTIONS SEMESTER 2 2022
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FAC2602 ASSIGNMENT 2 SOLUTIONS SEMESTER 2 2022. Selected Accounting Standards And Simple Group Structures. Draft the following pro-forma consolidation journal entries of the IWP Ltd Group for the year ended 31 August 2022, after taking the above-mentioned information into account: (a) Eliminatio...

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  • September 8, 2022
  • 8
  • 2022/2023
  • Exam (elaborations)
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  • fac2602
  • fac2602 assignment
  • fac2602 selected accounting standards and simple group structures
  • selected accounting standards and simple group structures
  • fac2602 assignment 2 solutions semester 2 2022

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FAC2602
ASSIGNMENT 2
SOLUTIONS
SEMESTER 2 2022

, PART A

Draft the following pro-forma consolidation journal entries of the IWP Ltd Group
for the year ended 31 August 2022, after taking the above-mentioned information
into account:

(a) Elimination of the unrealised profit included in the opening and closing
inventory

DR CR
Retained Earnings – BigCat Ltd 66 666,67
Cost of sales – BigCat Ltd 66 666,67
Elimination of the unrealised profit included in the
opening inventory (400 000 x 20/120)

Cost of Sales – BigCat Ltd 58 333,33
Inventory – IWP Ltd 58 333,33
Elimination of the unrealised profit included in the
Closing inventory (350 000 x 20/120)




(b) Elimination of the profit on sale of the machine and the related depreciation
from the date of transaction.

DR CR
Retained Earnings – IWP Ltd 60 000,00
Machinery – BigCat Ltd 60 000,00
Elimination of profit on sale of machinery

Accumulated Depreciation – BigCat Ltd
(60 000 x 25% x 18/12) 22 500,00
Depreciation – IWP Ltd (60 000 x 25%) 15 000,00
Retained Earnings – IWP Ltd
(60 000 x 25% x 6/12) 7 500,00


(c) Recording of the non-controlling interest’s share in the current-year
revaluation surplus.

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