Reference no: EM132952641

Question - On 1 July 2017, Hawk Ltd acquired all the issued shares (cum div.) of Magpie Ltd for $1,200,000. At this date the equity of Magpie Ltd consisted of:

Share capital $850,000

General reserve $55,000

Retained earnings $245,000

At acquisition date, Magpie Ltd reported a dividend payable of $2 000. All the identifiable assets and liabilities of Magpie Ltd were recorded at amounts equal to their fair values except for:

Plant (cost $250,000), Carrying Amount = $200,000, Fair Value = $220,000

Land Carrying Amount= 320,000, Fair Value= 350,000

Inventory Carrying Amount= 58,000, Fair Value= 64,000

The plant was considered to have a further five-year life. All inventory was sold by 30 June 2018. The dividend payable recorded at acquisition date was paid in July 2017.

Required - Prepare the acquisition analysis and consolidation worksheet entries for the preparation by Hawk Ltd of its consolidated financial statements at 30 June 2018.