The following intragroup transactions took place during the period ended 30 June 2022: Heart Ltd paid $25 000 during the period ended 30 June 2022 as management fees for services provided by Clear Ltd. During the period ended 30 June 2022, Heart Ltd declared a final dividend of $12
The following intragroup transactions took place during the period ended 30 June 2022: Heart Ltd paid $25 000 during the period ended 30 June 2022 as management fees for services provided by Clear Ltd. During the period ended 30 June 2022, Heart Ltd declared a final dividend of $12
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The following intragroup transactions took place during the period ended 30 June 2022:
- Heart Ltd paid $25 000 during the period ended 30 June 2022 as management fees for services provided by Clear Ltd.
- During the period ended 30 June 2022, Heart Ltd declared a final dividend of $12 000 out of post-acquisition profits.
- Heart Ltd rented a spare warehouse to Clear Ltd starting from 31 December 2021 for 1 year. The total charge for the rental was $40 000, and Clear Ltd will pay this amount to Heart Ltd at 31 December 2022.
Required
In relation to the above intragroup transactions:
1. Prepare adjusting journal entries for the consolidation worksheet at 30 June 2022.
2. Explain in detail why you made each
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