On 1 July 2018, River Ltd acquired 90% of the share capital to gain control of...

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On 1 July 2018, River Ltd acquired 90% of the share capital togain control of Creek Ltd. The following intra-group transactionsoccurred during the year ending 30 June 2019.
During the 2018 - 2019 period, River Ltd sold inventory toCreek Ltd for      $2,000,000. River Ltdpurchased this inventory for $1,700,000. By 30 June 2019, Creek Ltdhas 30% of that inventory still on hand as unsold.
Creek Ltd declared a final dividend of $1,500,000 from currentyear’sprofits.
Creek Ltd paid Water River Ltd, a consultancy fee of $70,000during theyear.
River Ltd provided a loan of $10,000,000 to Creek Ltd. The loancharges 5% interest
annually. One half of the interest for the current year remainsunpaid as at
30 June 2019.
Creek Ltd sold land to River Ltd for $1,350,000. The land waspurchased by Creek Ltd for $600,000.
Prepare the journal entries required to eliminate theintra-group transactions noted above.

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JOURNAL ENTERIES TO ELIMINATE INTRAGROUP TRANSACTIONS year ended 30062019 a River Ltd sold goods to Creek Ltd Entry in the consolidated books to eliminate unrealised profit in the books of River Ltd on goods sold to Creek Ltd PROFIT REDUCED Profit Loss ac Dr River Ltd 90000 Refer the calculation below ASSET REDUCED To Inventoryinhand Creek Ltd 90000 Calculation Inventoryinhand in the books of Creek Ltd as on 30062019 30 See Answer

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