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- November 19, 2019 at 1:28 pm #553082
Hi, I’m wondering if anyone can help me with these transactions’ journal entries:
Acquirer: A
Acquiree: B
Acquired date: 1 October 2010Downstream transactions:
1. On 1 January 2016, A sold asset to B for $300000. The asset had originally cost A $450500 and the accumulated depreciation at the date of the sale was $33500. The asset was assessed as having a remaining useful life of five years.2. During the current financial year, B incurred $20000 for services performed by A for staff training. An amount of $3500 from this amount was still outstanding at the end of the current financial year. The amount was included under the ‘Other receivables’ and ‘Other payables’ accounts respectively.
Upstream transactions:
1. On 30 January 2016, A purchased 600 $180 10% debentures issued by B at nominal value on the open market. Interest on the debentures is paid half yearly on 31 December and 30 June. Interest have been accrued for the year ended 30 June 2017. Interest income account was classified as ‘other income’ in A’s books and interest expense account was classified as ‘finance costs’ in B’s books. B has yet to make any repayments on the loan.2.On 1 May 2015, B sold its equipment to A for $1250000 at a before tax profit of $470000. At the time of its disposal it was estimated to have a remaining useful life of 4 years using straight-line depreciation bases. There was no residual value expected.
November 19, 2019 at 4:11 pm #553098Please ask in the relevant Ask the Tutor Forum to get an answer – not in the General Forum.
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