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  3. baker ltd sold an item of machinery to its subsidiary...

Question: baker ltd sold an item of machinery to its subsidiary...

Question details

Baker Ltd sold an item of machinery to its subsidiary Lanny Ltd for $8000. The original cost of the machinery was $12000 and the carrying amount of the machinery in the books of Baker Ltd at the time of sale was $10000. The consolidation journal entry at the end of the financial year is:


 

a.

 

Dr Profit on sale                          $4000 

    Cr  Machinery                                           $2000

    Cr Accumulated depreciation                  $2000


 

b.

 

Dr Machinery                               $6000

      Cr Loss on sale                                       $2000

      Cr Accumulated depreciation                $2000


 

c.

Dr Machinery                              $4000 

      Cr Loss on sale                                        $2000

      Cr Accumulated depreciation                 $2000

d.

Dr Machinery                              $4000 

      Cr Profit on sale                                      $2000

      Cr Accumulated depreciation                $2000

 

 

 

AASB 138 Intangibles prohibits the recognition of the following internally generated identifiable intangibles:

 

                                                   I            II            III           IV

Brands                                     No        No         No         Yes

Mastheads                              No        Yes        Yes        Yes

Publishing titles                      No         No        Yes        Yes

Customer lists                         No        Yes        No         Yes

 

Select one:
a.

I

b.

II

c.

III

d.

IV

 

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