On 1 July 2018, River Ltd acquired 90% of the share capital to gain control of Creek Ltd.  The following intra-group transactions occurred during the year ending 30 June 2019.

  1. During the 2018 – 2019 period, River Ltd sold inventory to Creek Ltd for $2,000,000.  River Ltd purchased this inventory for $1,700,000. By 30 June 2019, Creek Ltd has 30% of that inventory still on hand as unsold.
  2. Creek Ltd declared a final dividend of $1,500,000 from current year’s profits.
  3. Creek Ltd paid Water River Ltd, a consultancy fee of $70,000 during the year.
  4. River Ltd provided a loan of $10,000,000 to Creek Ltd. The loan charges 5% interest
    One half of the interest for the current year remains unpaid as at
    30 June 2019.
  5. Creek Ltd sold land to River Ltd for $1,350,000. The land was purchased by Creek Ltd for $600,000.

 

Required:

Prepare the journal entries required to eliminate the intra-group transactions noted above.

Click on Buy Solution and make payment. All prices shown above are in USD. Payment supported in all currencies. Price shown above includes the solution of all questions mentioned on this page. Please note that our prices are fixed (do not bargain).

After making payment, solution is sent within 2 to 5 minutes on your Email ID. But it may take up to 1 hour in case of high load on server. Solution is available in Word or Excel format unless otherwise specified.


If your question is slightly different from the above question, please contact us at info@myassignmentguru.com with your version of question.