Prepare the consolidated financial statements of Ethan Ltd

Reference no: EM132312738

Corporate Accounting and Reporting Assignment - Report on Financial Statements and Calculations

Purpose - To allow students to demonstrate their ability to related corporate accounting concepts and applying their understanding of accounting standards AASB 3, AASB 10, and AASB 12. Students will be required to complete complex calculation and journal entries for business combinations, consolidation and other relevant accounting standards.

Topic - Consolidation worksheet

Ethan Ltd acquired all the issued shares (ex div.) of Darren Ltd on 1 July 2017 for $110 000. At this date Darren 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 Darren Ltd were recorded at amounts equal to their fair values at acquisition date except for:

	Carrying amount	Fair value
Inventories	$14 000	$16 000
Machinery (cost $100 000)	92 500	94 000

The machinery was considered to have a further 5-year life. Of the inventory, 90% was sold by 30 June 2018. The remainder was sold by 30 June 2019.

Both Darren Ltd and Ethan Ltd use the valuation method to measure the land. At 1 July 2017, the balance of Ethan Ltd's asset revaluation surplus was $13 500.

In May 2018, Darren Ltd transferred $3000 from the retained earnings at 1 July 2017 to a general reserve.

The tax rate is 30%.

The following information was provided by the two companies at 30 June 2018.

Required: Prepare the consolidated financial statements of Ethan Ltd at 30 June 2018.

1- Acquisition Analysis at 30 June 2018.

2- Worksheet Adjustment journal entries at 30 June 2018.

3- Complete Worksheet.

Show the acquisition analysis and consolidation journal entries including business combination valuation reserve entries and pre-acquisition journal entries.

Reference no: EM132312738

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Reviews

len2312738

5/27/2019 11:14:46 PM

I need full assignment with proper solution intro summary conclusion references and data presentation. Marking Guide: Interpretation and representation – 20%, Calculations – 50%, Analysis – 10%, Assumptions – 10%, Communication – 10%. The Total mark will be scaled to 20 subject marks.

len2312738

5/27/2019 11:14:41 PM

Provides accurate explanations of information presented in mathematical form. Makes skilful inferences based on that information. Skillfully converts relevant information into an insightful mathematical portrayal in a way that contributes to a further or deeper understanding. Performs accurate calculations which are sufficiently comprehensive to solve the problem(s). All formulae and workings provided. No errors.

len2312738

5/27/2019 11:14:36 PM

Uses correct and complete quantitative analysis. Makes sophisticated, relevant and correct conclusions. Explicitly describes assumptions and provides comprehensive, compelling and justified rationale to explain assumptions. No errors in logic. Gives a complete response with a dear, unambiguous explanation and/or description. Includes all appropriate and complete formulas and calculations. Communicates effectively to the identified audience. Presents strong supporting arguments which are logically sound and complete.

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