Ann Ltd acquired all of the share capital of Nelly Ltd.
Prepare the consolidation worksheet adjustment entry for the following intra-group transaction:-
Assume that the consolidation process is being undertaken at 30 June 2008, and that an income tax rate of 30% applies.
1) On 1 July 2007, Ann Ltd sold a motor vehicle to Nelly Ltd for $10,000. This had a carrying amount to Ann Ltd of $7,000. Both entities depreciate motor vehicles at a rate of 10% p.a. on cost.