Reference no: EM132476364

Sky Ltd acquired all the issued shares (Ex div.) of Nu Ltd on 1 July 2018 for $100 000. At this date Nu Ltd recorded a dividend payable of $10 000 and equity of:

Share capital               $54 000

Retained earnings          36 000

Asset revaluation surplus  18 000

• All the identifiable assets and liabilities of Nu Ltd were recorded at amounts equal to their fair values at acquisition date except for:

                                     Carrying amount                       Fair value

Inventories                           16 000                                18 000

Machinery (cost $100 000)        92 500                                 94 000

• The machinery was considered to have a further 5-year life. 90% of the inventory was sold by 30 June 2019. The remainder was sold by 30 June 2020.
• Both Sky Ltd and Nu Ltd use the valuation method to measure the land. At 1 July 2018, the balance of Sky LA',, asset revaluation surplus was $13 500. In May 2019, Nu Ltd transferred $3 000 from the retained earnings at 1 July 2018 to a general reserve. The tax rate is 30%.

Required

Question A. Prepare the acquisition analysis and BCVR entries of Sky Ltd at 1 July 2018

Question B. Prepare the consolidation worksheet entries at 30 June 2019.

Question C Complete the consolidation worksheet at 30 June 2019.

Attachment:- skyltd.rar