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Zeus Ltd Owns 100 Per Cent of the Issued Capital

Question 28

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Zeus Ltd owns 100 per cent of the issued capital of Ares Ltd. On 1 July 2005 Zeus Ltd purchased an item of equipment from Ares Ltd for $800,000. Ares had owned the equipment for 2 years. It originally cost $890,000 and the accumulated depreciation was $178,000 at the time of sale. The equipment has been depreciated over this time, but not written down or revalued. The remaining useful life of the equipment at 1 July 2005 is estimated to be 8 years. Zeus Ltd expects the benefits to be obtained from the equipment to be evenly received over its useful life. The tax rate is 30 per cent.
What are the consolidation journal entries required for this inter-company transaction for the period ended 30 June 2007?


A) Zeus Ltd owns 100 per cent of the issued capital of Ares Ltd. On 1 July 2005 Zeus Ltd purchased an item of equipment from Ares Ltd for $800,000. Ares had owned the equipment for 2 years. It originally cost $890,000 and the accumulated depreciation was $178,000 at the time of sale. The equipment has been depreciated over this time, but not written down or revalued. The remaining useful life of the equipment at 1 July 2005 is estimated to be 8 years. Zeus Ltd expects the benefits to be obtained from the equipment to be evenly received over its useful life. The tax rate is 30 per cent. What are the consolidation journal entries required for this inter-company transaction for the period ended 30 June 2007? A) B) C) D) E) None of the given answers.
B) Zeus Ltd owns 100 per cent of the issued capital of Ares Ltd. On 1 July 2005 Zeus Ltd purchased an item of equipment from Ares Ltd for $800,000. Ares had owned the equipment for 2 years. It originally cost $890,000 and the accumulated depreciation was $178,000 at the time of sale. The equipment has been depreciated over this time, but not written down or revalued. The remaining useful life of the equipment at 1 July 2005 is estimated to be 8 years. Zeus Ltd expects the benefits to be obtained from the equipment to be evenly received over its useful life. The tax rate is 30 per cent. What are the consolidation journal entries required for this inter-company transaction for the period ended 30 June 2007? A) B) C) D) E) None of the given answers.
C) Zeus Ltd owns 100 per cent of the issued capital of Ares Ltd. On 1 July 2005 Zeus Ltd purchased an item of equipment from Ares Ltd for $800,000. Ares had owned the equipment for 2 years. It originally cost $890,000 and the accumulated depreciation was $178,000 at the time of sale. The equipment has been depreciated over this time, but not written down or revalued. The remaining useful life of the equipment at 1 July 2005 is estimated to be 8 years. Zeus Ltd expects the benefits to be obtained from the equipment to be evenly received over its useful life. The tax rate is 30 per cent. What are the consolidation journal entries required for this inter-company transaction for the period ended 30 June 2007? A) B) C) D) E) None of the given answers.
D) Zeus Ltd owns 100 per cent of the issued capital of Ares Ltd. On 1 July 2005 Zeus Ltd purchased an item of equipment from Ares Ltd for $800,000. Ares had owned the equipment for 2 years. It originally cost $890,000 and the accumulated depreciation was $178,000 at the time of sale. The equipment has been depreciated over this time, but not written down or revalued. The remaining useful life of the equipment at 1 July 2005 is estimated to be 8 years. Zeus Ltd expects the benefits to be obtained from the equipment to be evenly received over its useful life. The tax rate is 30 per cent. What are the consolidation journal entries required for this inter-company transaction for the period ended 30 June 2007? A) B) C) D) E) None of the given answers.
E) None of the given answers.

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