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%.

	Sky Ltd	Nu Ltd		Adjustments			Group
				Dr	Cr
Profit before tax	120 000	12 500
Income tax expense	(56 000)	(4 200)
Profit	64 000	8 300
Retained earnings (1/7/18)	80 000	36 000
Transfer from BCVR
	144 000	44 300
Transfer to general reserve	(0)	(3 000)
Retained earnings (30/6/19)	144 000	41 300
Share capital	360 000	54 000
BCVR
General reserve	10 000	3 000
	514 000	98 300
Asset revaluation surplus ( I f7/18)	13 500	18 000
Gains	5 000	2 000
Asset revaluation surplus (30/6/19)	18 500	20 000
	532 500	118 300
Liabilities	42 500	13 000
	575 000	131 300
Land	160 000	20 000
Plant & machinery	360 000	125 600
Accum depreciation	(110 000)	(33 000)
Inventory	55 000	18 700
Shares in Nu Ltd	110 000	0
	575 000	131 300

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