Ocean Ltd is the parent entity to the wholly owned subsidiaries of River Ltd, Creek...
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Accounting
Ocean Ltd is the parent entity to the wholly owned subsidiaries of River Ltd, Creek Ltd, and Puddle Ltd. During the year ended 30 June 2022 the following transactions occurred within Ocean Ltd group. The perpetual inventory system has been adopted by all entities in the Ocean Ltd group and the tax rate is 30% for all accounting periods.
On 01 July 2021 Ocean Ltd sold an item of equipment to Creek Ltd for $820,000 cash. The original cost of the equipment was $950,000. Ocean Ltd adopted an accounting policy whereby equipment was being depreciated on a straight line basis over its useful life of 8 years. The carrying amount of the equipment in Ocean Ltd financial statements at the date of sale was $520,000. Subsequent to the transfer, Creek Ltd depreciated the equipment on a straight line basis over its remaining useful life of 5 years.
QUESTION :
Fill in the missing amount for the following accounts that will appear in the consolidated adjusting journal entries for the group for the year ended 30 June 2022:
a) Gain on Sale will be debited by $?
b) Deferred Tax Asset will be debited by $.
c) A depreciation adjustment will be recorded by a credit to Depreciation expense of $.
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