Apple Ltd Owns All the Issued Capital of Pear Ltd

question 15

Multiple Choice

Apple Ltd owns all the issued capital of Pear Ltd.On 1 July 2014,Pear Ltd purchased an item of plant from Apple Ltd for $1 000 000.Apple Ltd had owned the plant for 5 years.It originally cost $1 350 000 and the accumulated depreciation at 1 July 2004 is $562 500.The remaining useful life of the equipment on the date of sale to Pear Ltd is estimated to be 7 years.The pattern of benefits is expected to be obtained from the equipment evenly over its useful life.The tax rate is 30%.Round all calculations to the nearest dollar. What are the consolidation journal entries required for this inter-company transaction for the periods ended 30 June 2015 and 30 June 2016?

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Definitions:

Neuron

A specialized cell transmitting nerve impulses; a nerve cell.

Reflexes

Involuntary and nearly instantaneous movements in response to stimuli, as part of the body's protective mechanism.

Medulla Oblongata

The lowest section of the brainstem, controlling autonomic functions such as breathing and heart rate.

Sneezing

Sneezing is a reflex action to expel air forcefully from the nose and mouth to clear the nasal passages.