ACF2100: Chips Ltd Sold Inventory To Fish Ltd On 1 October 2017 For $35,000: Financial Accounting Coursework, DU, Australia

University Deakin University
Subject ACF2100: Financial Accounting

Fish Ltd owns 100% of the shares of Chips Ltd. The following transactions have occurred:

a) Chips Ltd sold inventory to Fish Ltd on 1 October 2017 for $35,000. This inventory had originally cost Chips Ltd $31,000. One-half of the inventory was sold by Fish Ltd to Gravy Ltd for $15,000.

b) On 1 January 2017, Fish Ltd sold inventory, which had originally cost $21,000, to Chips Ltd for $23,400. In July 2017, Chips Ltd sold all inventory to Flake Ltd for $28,000.

c) On 1 July 2016, Fish Ltd sold machinery to Chips Ltd at a transfer price of $62,000. The machinery had been written down to $55,000 at the time of sale. Machinery is depreciated on a straight-line basis at 20% p.a.

d) During 2018, Fish Ltd provides management services to Chips Ltd for $25,000. At 30 June 2018, $3,500 remains unpaid.

e) On 30 June 2018, Chips Ltd declared a dividend of $15,000, while Fish Ltd declared a dividend of $6,500.

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