Violin Ltd acquired a 40% interest in Drum Ltd in which it invested $188,000 on 1 July 2015. Violin Ltd has signed a joint venture agreement with the…

Violin Ltd acquired a 40% interest in Drum Ltd in which it invested $188,000 on 1 July 2015. Violin Ltd has signed a joint venture agreement with the other investors in Drum Ltd providing joint control to all investors. The share capital, reserves and retained earnings of Drum Ltd at the investment date and at 30 June 2016 were as follows:

 1 July 201530 June 2016Share capital$300,000$300,000Asset revaluation reserve-94,000General reserve-15,000Retained earnings100,000109,000At 1 July 2015, all the identifiable assets and liabilities of Drum Ltd were recorded at amounts equal to their fair values.

The following is applicable to Drum Ltd for the year to 30 June 2016:

  1. Profit (after income tax expense of $11,000): $38,800
  2. Increase in reservesGeneral (transferred from retained earnings): $15,000
  3. Asset revaluation (revaluation of freehold land and buildings at 30 June 2016): $94,000
  4. Dividends paid to shareholders: $15,000.

Violin Ltd does not prepare consolidated financial statements.

Required

Prepare the journal entries in the records of Violin Ltd for the year ended 30 June 2016 in relation to its investment in the joint venture, Drum Ltd.

Violin Ltd acquired a 40% interest in Drum Ltd in which it invested $188,000 on 1 July 2015. Violin Ltd has signed a joint venture agreement with the other investors inDrum Ltd providing joint control to all investors. The share capital, reserves and retained earnings of Drum Ltd at the investment date and at 30 June 2016 were as follows: Share capital $300,000 $300,000Asset revaluation reserve – 94,000General reserve – 15,000Retained earnings 100,000 109,000 At 1 July 2015, all the identifiable assets and liabilities of Drum Ltd were recorded at amounts equal to their fair values.The following is applicable to Drum Ltd for the year to 30 June 2016: a. Profit (after income tax expense of $11,000}: $38,0000. Increase in reserves 0 General (transferred from retained earnings}: $15,000 0 Asset revaluation (revaluation of freehold land and buildings at 30 June 2016): $94,000c. Dividends paid to shareholders: $15,000. Violin Ltd does not prepare consolidated financial statements. RequiredPrepare the journal entries in the reoords of Violin Ltd for the year ended 30 June 2016 in relation to its investment in the joint venture, Drum Ltd.

Show more

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more