group accounys journal entries

World Retailing Ltd acquired 100 per cent of the shares of Adelaide Retailing
Ltd on 1 July 2017-that is two years earlier. The cost of investment was $500 000. At that
date the capital and reserves of Adelaide Retailing Ltd were:
Share capital $255 000
Retained earnings $205 000

At the date of acquisition all assets of Adelaide Retailing Ltd were considered to be fairly
valued. Adelaide Retailing Ltd declared and paid dividend $120 000 on 30 June 2019. World
Retailing Ltd incurred the following transactions with Adelaide Retailing Ltd during financial
year 2018-2019:
? During the year World Retailing made total sales to Adelaide Retailing of $71 000, while
Adelaide Retailing sold $56 000 in inventory to World Retailing.
? The closing inventory in World Retailing includes inventory acquired from Adelaide
Retailing at a cost of $45 000. This cost Adelaide Retailing $38 000 to purchase.
? The opening inventory in World Retailing as at 1 July 2018 included inventory acquired
from Adelaide Retailing for $62 500 that cost Adelaide Retailing $53 750.
? Adelaide Retailing paid $55 000 in management fees to World Retailing.
? On 1 July 2018 World Retailing sold an item of plant to Adelaide Retailing for $145 000
when its carrying amount in World Retailing’s accounts was $100 000 (initial cost $168
650, accumulated depreciation $68 650). This plant is assessed as having a remaining
useful life of nine years.
You were appointed as the financial accountant at World Retailing Ltd in May 2019.