Exam 20: Consolidation: Intragroup Transactions

A subsidiary sold inventory to its parent for $50 000.The inventory originally cost the subsidiary $38 000.At balance sheet date,the parent had sold 50% of the inventory to an external party.The company tax rate is 30%.Which of the following is the deferred tax item that is recognised on consolidation?

Where an intragroup sale of an asset at a profit has been made and the asset was classified as plant in the selling entity's books,but subsequently classified as inventory in the buying entity's books,a credit adjustment is required against cost of sales in the year of sale.

A parent sold some inventory to its subsidiary for $55 000.The goods had originally cost the parent $40 000.At the end of the year all of the inventory was still on hand.The consolidation adjustment entry to eliminate this transaction will include the following line items?

On 16 May 2014,Zebra Ltd sold equipment to its subsidiary Nando Ltd for $100 000,this asset having a carrying amount at time of sale of $80 000.The equipment was regarded by Zebra Ltd as a depreciable non-current asset,being depreciated at 10% p.a.on cost,whereas Nando Ltd records the machinery as inventory.The asset was sold by Nando Ltd before 30 June 2014.The worksheet entry for the year ended 30 June 2014 would include which of the following adjustments?

Elimination consolidation entries relating to intragroup services do not need to be carried forward to future periods.

Where there is an intragroup sale of inventory and the inventory has been sold to external parties prior to the end of the reporting period,no adjustment is required on consolidation.

During the year ended 30 June 2014,a subsidiary sold inventory to a parent for $90 000.The inventory had previously cost the subsidiary entity $72 000.By 30 June 2014 the parent had sold 75% of the inventory to a party outside the group.The remaining inventory was sold externally in July 2014.The company tax rate is 30%.Which of the following is the adjustment entry in the consolidation worksheet at 30 June 2015?