Solution-Prepare the consolidation journal entries

Prepare the consolidation journal entries

Reference no: EM133185685

Question - On the 1st July 2021, Abrams Ltd purchased 75% of the issued shares of Constantia Ltd for $214,500. The partial goodwill method is used on consolidation. The equity of Constantia Ltd was made up as follows:

At the date of acquisition all the identifiable net assets were recorded at fair value except for machinery which had a carrying value of $26,000, a fair value of $52,000 and a remaining useful life of 5 years. The following information has been extracted from the financial statements of Constantia Ltd:

	30th June 2022	30th June 2023
Retained earnings (opening balance)	$52,000	$62,400
Profit after tax	31,200	39,000
Dividend paid	(20,800)	(13,000)
Retained earnings (closing balance)	62,400	88,400
Share capital	104,000	104,000
Total equity	$166,400	$192,400

Required - Prepare the consolidation journal entries for consolidated financial statements prepared by Constantia Ltd for: The date of acquisition, 1st July 2021 and at 30th June 2022, and at 30th June 2023.

Reference no: EM133185685

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Prepare the consolidation journal entries

Reference no: EM133185685

Reference no: EM133185685

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