Accounting Problem solving

(f)
Dr Group sales $92000 Cr Group Purchases $92000
Dr Sarina income statement $6000 Cr Group inventory $6000
Unrealized profit = ½*12000
(g)
No entry is made for this transaction since the year 2017-18 is not affected as the unrealized profit is now realized
(h)
Dr Group sales $60000 Cr Group Purchases $60000
(i)
Dr Consolidated income statement $35000 Cr Group PPE $35000
Unrealized profit = selling price –book value
$116000-$81000=$35000
Dr Accumulated depreciation $7000 Cr Subsidiary income statement $7000
Depreciation for 5 years according to group’s point of view
$81000/5=$16200
Depreciation for 5 years according to subsidiary’s point of view
$116000/5= 23200
(j)
No entry made for this transaction as it does not affect the group accounts
(k)
Inventory account
Dr -Hahndorf-Sarina $40000
$50000 Cr -Unrealized profit
-balance carried forward $6000
$84000
(l)
Others assets account
Dr Other assets –H
-S $600000
$726000 Cr -unrealized profit (CIS)
-accumulated depreciation
-balance carried forward $35000
$7000
$1284000
(m)
Controlling interest account
Dr Price paid $700000 Cr Share capital
General reserve
Retained earnings
Goodwill $500000
$80000
$30000
$90000
Consolidated worksheet
Item Hahndorf ltd Sarina ltd Consolidated totals
Sales revenue $1000000 $800000 $1648000 (F &h)
Cost of sales (600000) (600000) (1048000)
Gross profit 600000
Divided from Sarina 10000 10000
…