1. Discuss the accounting processes, calculations, and reason for these consolidation entries you have made for the Motor vehicle and all the related accounts, including Depreciation30/06/2022Accumulated depreciation - Motor vehicleDR30000 Motor vehicleCR15000 Deferred tax liabilityCR4500 Business combination valuation reserveCR10500 30/06/2022Depreciation expense - Motor VehicleDR3000 Retained earnings (1/7/21)DR3000 Accumulated depreciation - Motor VehicleCR6000 ($15000/5 p.a. for 2 years) 2. Bowie Ltd provided David Ltd with a loan for $425,000 in June 2021 with 15% interest rate annually. Explain the accounting processes, calculations and reason for these consolidation entries.30/06/2022Loan payableDR425000 Loan receivableCR425000 30/06/2022Interest RevenueDR63750 Interest ExpenseCR63750 30/06/2022Interest PayableDR63750 Interest ReceivableCR63750 please solve both the questions.

Bowie Ltd has provided a loan to the David Ltd company for $425,000 in June 2021 and the interest…

Answered: Bowie Ltd provided David Ltd with a…

Bowie Ltd provided David Ltd with a loan for $425,000 in June 2021 with 15% interest rate annually. Explain the accounting processes, calculations and reason for these consolidation entries.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter7: Fixed Assets, Natural Resources, And Intangible Assets

Section: Chapter Questions

Problem 7.2.1MBA

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

1. Discuss the accounting processes, calculations, and reason for these consolidation entries you have made for the Motor vehicle and all the related accounts, including Depreciation

30/06/2022	Accumulated depreciation - Motor vehicle	DR	30000
	Motor vehicle	CR	15000
	Deferred tax liability	CR	4500
	Business combination valuation reserve	CR	10500

30/06/2022	Depreciation expense - Motor Vehicle	DR	3000
	Retained earnings (1/7/21)	DR	3000
	Accumulated depreciation - Motor Vehicle	CR	6000
	($15000/5 p.a. for 2 years)

2. Bowie Ltd provided David Ltd with a loan for $425,000 in June 2021 with 15% interest rate annually. Explain the accounting processes, calculations and reason for these consolidation entries.

30/06/2022	Loan payable	DR	425000
	Loan receivable	CR	425000

30/06/2022	Interest Revenue	DR	63750
	Interest Expense	CR	63750

30/06/2022	Interest Payable	DR	63750
	Interest Receivable	CR	63750

please solve both the questions.

Definition Definition Estimated future tax made while preparing accounts. Deferred tax is estimated based on past and present transactions from financial statements. It is not the actual tax that needs to be paid or is refundable from the revenue authority; it is an accounting entry. It is necessary to account for deferred tax due to difference between accounting profits and taxable profits.

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