Corporate Accounting: Requirements 1, 2 and 3

This article covers the requirements 1, 2 and 3 of Corporate Accounting. It includes consolidation journal entries, income statement, balance sheet, and consolidation worksheet.

Running head: CORPORATE ACCOUNTING
Corporate Accounting
Name of the Student:
Name of the University:
Author’s Note:

1CORPORATE ACCOUNTING
Table of Contents
Requirement 1:.................................................................................................................................2
Requirement 2:.................................................................................................................................3
Requirement 3:.................................................................................................................................6

2CORPORATE ACCOUNTING
Requirement 1:

3CORPORATE ACCOUNTING
Requirement 2:

4CORPORATE ACCOUNTING
Dr. Cr.
Date Amount Amount
1 Business Combination Valuation Entries:
1.a Accumulated Depreciation A/c. 30000
Plant A/c. $27,000
Deferred Tax Liability A/c. $900
Business Combination Valuation
Reserve A/c. $2,100
1.b Depreciation Expense A/c. 600
Retained Earnings A/c. (1/7/16) 600
Accumulated Depreciation A/c. 1200
1.c Deferred Tax Liability A/c. 360
Income Tax Expense A/c. 180
Retained Earnings A/c. (1/7/16) 180
1.d Goodwill A/c. $2,250
Business Combination Valuation
Reserve A/c. $2,250
2 Pre-Acquisition Entries:
At 1/7/15:
2.a Share Capital A/c. $66,000
Retained Earnings A/c. (1/7/15) $6,000
Business Combination Valuation
Reserve A/c. $18,000
Shares in Brim Ltd. A/c. $90,000
At 30/6/17:
2.b Share Capital A/c. $66,000
Retained Earnings A/c. (1/7/16) 19650
Business Combination Valuation
Reserve A/c. $4,350
Shares in Brim Ltd. A/c. $90,000
Particulars
In the books of Tuna Ltd.
Consolidation Journal Entries

5CORPORATE ACCOUNTING
3 Sales & Profit in Closing Inventory:
3.a Sales Revenue A/c. 21000
Cost of Sales A/c. 21000
3.b Sales Revenue A/c. 4500
Cost of Sales A/c. 4200
Inventory A/c. 300
3.c Deferred Tax Asset A/c. 90
Income Tax Expense A/c. 90
4 Profit in Opening Inventory of Brim Ltd.:
Retained Earnings A/c. (1/7/16) 420
Income Tax Expenses A/c. 180
Cost of Sales A/c. 600
5 Sale of Plant in Current Period:
5.a Proceeds on Sale of Plant A/c. 15000
Carrying Amount of Plant Sold A/c. 14000
Plant A/c. 1000
5.b Deferred Tax Assets A/c. 300
Income Tax Expense A/c. 300
5.c Accumulated Depreciation A/c. 100
Depreciation Expense A/c. 100
5.d Income Tax Expense A/c. 30
Deferred Tax Assets A/c. 30

6CORPORATE ACCOUNTING
6 Sale of Inventory classified as Plant in earlier period:
6.a Retained Earnings A/c. (1/7/16) 1400
Deferred Tax Assets A/c. 600
Plant A/c. 2000
6.b Accumulated Depreciation A/c. 600
Depreciation Expense A/c. 400
Retained Earnings A/c. (1/7/16) 200
6.c Income Tax Expense A/c. 120
Retained Earnings A/c. (1/7/16) 60
Deferred Tax Assets A/c. 180
7 Sale of Plant classified as Inventory in Current Period:
7.a Proceeds on Sale of Plant A/c. 9000
Carrying Amount of Plant Sold A/c. 7500
Cost of Sales A/c. 1500

7CORPORATE ACCOUNTING
Requirement 3:
Income Statement:

8CORPORATE ACCOUNTING
Balance Sheet:

9CORPORATE ACCOUNTING
Particulars Tuna Ltd. Brim Ltd.
Journal
Nos. Dr. Cr.
Journal
Nos. Group
Sales Revenue $64,500 $78,000 3.a,3.b $25,500 $1,17,000
Cost of Sales $30,900 $46,350 $27,300
3.a,3.b,
4,7.a $49,950
Gross Profit $33,600 $31,650 $67,050
Trading Expenses $4,800 $9,000 $13,800
Offi ce Expenses $7,950 $4,050 $12,000
Depreciation $1,800 $3,900 1.b $600 $500 5.c,6.b $5,800
$14,550 $16,950 $31,600
Profit from Trading $19,050 $14,700 $35,450
Proceeds from Sale of Plant $9,000 $15,000 5.a,7.a $24,000 $0
Carrying Amount of Plant Sold $7,500 $14,000 $21,500 5.a,7.a $0
Gain/Loss on Sale of machinery $1,500 $1,000 $0
Profit before Tax $20,550 $15,700 $35,450
Tax Expenses $11,100 $7,300
4,5.d,6.
c $330 $570
1.c,3.c,5
.b $18,160
Profit $9,450 $8,400 $17,290
Reatined Earnings (1/7/16) $48,000 $31,500
1.b,2.b,
4,6.a,6.
c $22,130 $380 1.c,6.b $57,750
Retained Earnings (30/6/17) $57,450 $39,900 $75,040
Share Capital $96,000 $66,000 2.b $66,000 $96,000
BCVR 2.b $4,350 $4,350 1.a,1.d $0
Total Equity $1,53,450 $1,05,900 $1,71,040
Current Liabilities $21,100 $10,500 $31,600
Deferred Tax Liability $11,000 $15,000 1.c $360 $900 1.a $26,540
Total Liabilities $32,100 $25,500 $58,140
Total Equities & Liabilities $1,85,550 $1,31,400 $2,29,180
Plant $57,000 $1,07,250 $30,000
1.a,5.a,6
.a $1,34,250
Accumulated Depreciation -$18,300 -$33,450
1.a,5.c,
6.b $30,700 $1,200 1.b -$22,250
Intangibles $12,000 $11,100 $23,100
Shares in Brim Ltd. $90,000 $90,000 2.b $0
Deferred Tax Asset $8,100 $9,450
3.c,5.b,
6.a $990 $210 5.d,6.c $18,330
Inventory $28,500 $24,600 $300 3.b $52,800
Receivables $8,250 $12,450 $20,700
Goodwill $0 $0 1.d $2,250 $2,250
Total Assets $1,85,550 $1,31,400 $2,29,180
Adjustments
Consolidation Worksheet: