Fac2602 Assignment 2 Semester 2 2022 solution & calculations

FAC2602 ASSIGNMENT NO:2
DUE DATE; 02/09/2022
THIS ASSIGNMENT SOLUTION INCLUDES ALL
CALCULATIONS.

, PART A

pro-forma consolidation journal entries of the IWP Ltd Group

for the year ended 31 August 2022, after taking the above-mentioned information

into account:(a) Elimination of the unrealised profit included in the opening and closing inventory

DR CR

Retained earning-BigCat Ltd(400 000 66 666.67

*20/120)

Cost of sales – BigCat Ltd 66 666,67

Cost of Sales – BigCat Ltd 58 333,33

Inventory – IWP Ltd(350000*20/120) 58 333,33

(b) Elimination of the profit on sale of the machine and the related depreciation from the date of
transaction.

DR CR



Profit on sale of machinery – IWP Ltd 60 000

Property,Plant,and machinery-BigCat Ltd 60 000

Accumulated Depreciation – BigCat Ltd

(60 000 * 25% * 18/12) 22 500

Retained Earnings – IWP Ltd (60000*6/12*25%) 7500

Depreciation – IWP Ltd (60 000 * 25%) 15 000



(c) Recording of the non-controlling interest’s share in the current-year revaluation surplus.

DR CR



Revaluation Surplus 45 000

Non – controlling interest 45 000

Recording of the non-controlling interest’s share in the current-year revaluation
surplus.(350 000 - 2000) *30%