Purple Ltd sold an item of plant to its subsidiary, Rain Ltd, on 1 January 2023 for $50 000. The asset had cost Purple Ltd $60 000 and had an useful life of 6 years when acquired on 1 January 2021 from an external party. The adjustment necessary on consolidation in relation to the transfer of plant as at 30 June 2023 will result in: Group of answer choicesa decrease in current year profit.an increase in current year profit and non-current assets.an increase in current year profit.a decrease in current year profit and non-current assets.

Kateri Ltd sold an item of plant to its subsidiary, Patrick Ltd, on 1 January 2023 for $50. The asset had cost A Ltd $60 and had a useful life of 6 years when acquired on 1 January 2021 from an external party. The adjustment necessary on consolidation to reflect the tax effect of the depreciation adjustment for the year ended 30 June 2023 will result in an increase in: Group of answer choicesincome tax expense.deferred tax liabilities.deferred tax assets.current tax liability.

Lane Ltd became a wholly owned subsidiary of Grant Ltd on 1 October 20X5.  The Grant Ltd Group has the year-end of 30 September.  On 1 April 20X6, Lane Ltd sold a plant to Grant Ltd for $430,000. At the date of sale, the plant had an original cost to Lane Ltd of $480,000 and accumulated depreciation of $90,000.  What entry would be posted as part of consolidation adjustments for the year ended 30 September 20X7 to eliminate the unrealised profit on the sale of the plant (ignore depreciation adjustments)? The applicable tax rate is 30%. a. Dr Gain on sale   $50,000Dr Plant                $50,000     Cr Accumulated depreciation       $100,000Dr Deferred tax asset           $15,000     Cr Income tax expense                  $15,000 b. Dr Opening Retained Earnings $40,000Dr Plant                                         $50,000     Cr Accumulated depreciation             $90,000Dr Deferred tax asset    $12,000     Cr Income tax expense               $12,000 c. Dr Accumulated depreciation $90,000     Cr Plant                                                 $50,000     Cr Opening Retained Earnings         $40,000Dr Income tax expense             $12,000     Cr Deferred tax liability                      $12,000 d. Dr Opening Retained Earnings  $40,000Dr Plant                                          $50,000     Cr Accumulated depreciation                $90,000Dr Deferred tax asset    $12,000    Cr Opening Retained Earnings         $12,000

Lily Limited acquired 100 percent of the shares of Daisy Limited on 1 January 20X7. At the date of acquisition, all assets of Daisy Limited were at fair value, other than an item of plant, which had a fair value $8,000. Daisy Limited adopts the historical cost model for measuring its plant. The original cost of this plant is $10,000 and the accumulated depreciation is $4,000. The plan is expected to have a remaining useful life of 5 years and no residual value. The tax rate is 30 percent.Lily Limited must prepare the consolidated financial statements for the financial year ended 31 December 20X7.What is the carrying amount of the plant as at 31 December 20X7 in Daisy Limited’s own financial statements?Group of answer choices$4,800$6,000$8,000$6,400

During the current period, a subsidiary entity sold inventories to its parent entity at a profit of $6 000. The goods had originally cost the subsidiary $30 000. All the inventories were still on hand at the end of the year. The consolidation adjustment entry would include the following line item: Group of answer choicesCR Inventories $30 000CR Inventories $18 000CR Inventories $24 000CR Inventories $6 000

A firm has received an additional order for 50,000 units of product X at $20. The firm is currently operating at practical capacity of 600,000 units. To meet this order, new equipment at a cost of $200,000 would have to be purchased, and this equipment would have to be scrapped after the order had been filled. The firm currently sells product X for $50 per unit, has variable costs of $15.80, and fixed costs of $600,000. What is the additional profit (loss) for the firm if it accepts the order?