Reference no: EM133416950

On 1 July 2021 Blue Ltd acquired 100% interest in Bell Ltd. Consideration consisted of $300,000 cash and a share issue of 40,000 shares in Bell Ltd. These shares were valued at a market rate of $6.00 on 1 July 2021.

At that date, Bell Ltd.'s net assets were represented by its shareholders' equity consisting of share capital of $100,000, retained earnings of $25,000 and general reserve of $5,000.

On the date of the acquisition, Blue Ltd and Bell Ltd agreed the following;

(a) Bell Ltd's land had a fair value of $280,000 and had a carrying amount of $200,000 in Hill Ltd's Balance sheet.
(b) Bell Ltd had recorded inventories with a carrying amount which was $10,000 lower than fair value. These inventories were sold to external parties by 30 June 2022 for $180,000.
(c) Bell Ltd records its plant with a carrying amount of $345,000, which had a cost of $400,000. However the fair value of this asset is $545,000 on acquisition date. The plant has a remaining 5 year useful life.
(d) An interim dividend was paid by Bell Ltd during the year. See worksheet.
(e) Assume 30% tax rate.

Required

b) Prepare consolidated worksheet entries for the year ending 30 June 2022. Include narrations and a reference number per entry.