Emu Ltd owns all of the shares of Cassowary Ltd. In relation to the following intragroup transactions, all parts of which are independent unless specified, prepare the consolidation worksheet adjusting entries for preparation of the consolidated financial statements as at 30 June 2016.
Assume an income tax rate of 30%.
(a) Emu Ltd sold inventory to Cassowary Ltd on 1 September 2015 for $26,900. This inventory had cost Emu Ltd $18,000. One-third of the inventory was sold by Cassowary Ltd to Goanna Ltd for $13,000 and one-third to Galah Ltd for $13,100.
(b) Emu Ltd manufactures certain items which it then markets through Cassowary Ltd. During the current period, Emu Ltd sold items for $18,000 to Cassowary Ltd at cost plus 20%. Cassowary Ltd has sold 75% of these transferred items at 30 June 2016.
(c) During June 2016, Cassowary Ltd declared a $2,000 dividend. The dividend was paid in August 2016.
(d) In January 2016, Cassowary Ltd paid a $4,500 interim dividend.
(e) Emu Ltd sold a warehouse to Cassowary Ltd for $149,200. This had originally cost Emu Ltd $122,800. The transaction took place on 1 January 2015. Cassowary Ltd charges depreciation at 5% p.a. on a straight-line basis.
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