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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The following intragroup transactions took place during the period ended 30 June 2022:

  1. Heart Ltd paid $25 000 during the period ended 30 June 2022 as management fees for services provided by Clear Ltd.
  2. During the period ended 30 June 2022, Heart Ltd declared a final dividend of $12 000 out of post-acquisition profits.
  3. 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 adjusting journal entry, whether there is a tax effect and if the NCI share of equity required adjustment.

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