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Prepare journal entries for the required consolidation data

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Reference no: EM132741957

On 30 June 2019, West Ltd gained control of North Ltd by purchasing all its share capital. On the control date, the fair values of North Ltd's following assets differed from their carrying amounts:

                                                                            Carrying amount ($)                    Fair value ($)
Land                                                               100,000                                120,000
Building (cost=$250 000, residual value=$10 000)     210,000                                230,000

Additional information:

  • North Ltd applied the cost model to buildings and land, and continued to do so after the control date. The group and North Ltd both apply straight-line depreciation to buildings. The above building had a further 5 years' useful life at 30 June 2019. The fair value of the above land was $150 000 on 30 June 2020.

REQUIRED

Problem 1: Prepare journal entries for the required consolidation data adjustments on 30 June 2020. Narrations (for journal entries) are not required.

Problem 2: Prepare journal entries neatly. An illustrative example is provided below for the format of journal entries.
Example only:

Dr Interest expense 5000
Cr Interest payable 5000

Reference no: EM132741957

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