Make proforma journal entries relating to the preparation

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On 1 January 2020 Jamii Ltd acquired 100% of Bidii Ltd for Ksh.2 billion when Bidii Ltd's share capital & reserves amounted to Ksh. 1 billion. The fair value of Bidii Ltd's assets & liabilities as at that date is Ksh. 1.5 billion. Bidii Ltd has no contingent liabilities. The Ksh.500 million difference between carrying value and fair value relates to an item of property, plant and equipment with 5 years remaining useful life and nil residual value.

Bidii Limited's profit for the year ended 31 December 2020 amounted to Ksh.670 million.

In 2020 Bidii Ltd sold inventory, which cost it Ksh.60 million to Jamii Ltd for Ksh.120 million. At 31 December 2020 Jamii Ltd.'s inventory included Ksh. 90 million inventory bought from Bidii Ltd.

Required:

Problem 1: The proforma journal entries relating to the preparation of consolidated financial statements

Reference no: EM132942675

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