Reference no: EM13501824

Question

On 30^thJune 2011 Peach Ltd acquired 100 per cent of the shares in Pear Ltd for $730,000 The following shows the financial positions of the companies as at 30 June 2011 (immediately following the acquisition).

 

	Peach Ltd	Pear Ltd
Equity	$	$
Share capital	1,314,000	292,000
Retained earnings	438,000	219,000
	1,752 000	511 000
Liabilities
Accounts payable	160,600	102,200
Long-term loans	292,000	277,400
Total liabilities	$452,600	379,600
Total equity and liabilities	$2,204,600	$890,600
Assets
Cash	146,000	73,000
Accounts receivable	189,800	131,400
Inventory	292,000	160,600
Investment in Pear Ltd	730,000
Land	438,000	146,000
Property, Plant and Equipment (PPE)	584,000	511,000
Accumulated depreciation on PPE	(175,200)	(131,400)
Total assets	$2,204,600	$890,600

Additional Information:·All of the assets and liabilities of Pear Limited were valued at fair value at acquisition with the exception of the land,which had a fair value of $204,500.·The tax rate is 30 per cent.

Required

Prepare the consolidation journal entries and consolidation worksheet for the above entities.Adapted from Leo et al. (2009) Company accounting (8^thed) John Wiley and Sons, Milton,Queensland.