Reference no: EM133019622

Question - On 1 July 2014, Ali Ltd acquired 80% of the issued shares of Harry Ltd for $139,200. At the date of acquisition, all identifiable assets and liabilities of Harry Ltd were recorded at fair value. For the financial period ended 30 June 2018, you, as the accountant of Ali Ltd, are provided with the following information in order for you to prepare consolidation journal entries:

i. By 30 June 2018, Harry Ltd declared $6,250 dividend from current year's profit.

ii. During the financial period ended 30 June 2018, Harry sold inventory to Ali Ltd for $5,750, recording a profit before tax of $800 and Ali Ltd sold half of these items to Ede Ltd.

iii. The opening inventory of Ali Ltd includes unrealised profit of $1,000 on inventory sold from Harry Ltd.

iv. On 1 July 2016, Harry Ltd sold plant to Ali Ltd for $13,750. Harry Ltd recorded a profit of $5,000 before tax. Ali Ltd applies a 10% p.a. straight-line method of depreciation in relation to this plant.

v. As at 30 June 2018, the opening Retained Earnings and Operating Profit after Tax of Harry Ltd are $28,000 and $13,750 respectively.

vi. The tax rate is 30%.

Required -

1) Prepare necessary consolidation journal entries to eliminate the intra-group transactions between Ali Ltd and Harry Ltd for the financial period ended 30 June 2018, according to the requirements of AASB 10 Consolidated Financial Statements.

2) Calculate the non-controlling interest (NCI) in Harry Ltd's opening Retained Earnings and Operating Profit after Tax for the financial period ended 30 June 2018.