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question question 4 8 marks belleview ltd is the parent company holding 90 percent i 4291587

Question

Question 4 (8 marks) Belleview ltd is the parent company holding 90 percent interest in the James Hardy ltd. For each of the following independent cases, provide adjusting entries necessary to eliminate the effect of intragroup transaction at 30 June 2016: (i) During the period James Hardy Ltd sold inventory to Belleview Ltd at a price of $80000. The cost of the inventory to James Hardy ltd was $56000. Seventy percent of the inventory has been sold by Belleview Ltd to outside third parties by the end of the period. (ii) During the period, James Hardy borrowed $500000 from Belleview Ltd which is still unpaid by the end of the period. During the period James Hardy Ltd has paid $10000 interest to Belleview Ltd for the borrowing. (iii) At the end of the year, James Hardy Ltd declared a dividend amounting to $60000. Belleview Ltd has declared a dividend of $80000. (iv) year ago, at 1 July 2015, James Hardy Ltd sold equipment to Belleview Ltd for a price of $270000. At the time of the sale, the carrying value of the equipment in the James Hardy Ltd's account was $150000 and the accumulated depreciation was $150000. Belleview is depreciating the equipment over a further 5 years period. The expected salvage value is zero. Assume a corporate tax rate of 30 percent

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