Prepare the consolidation worksheet entries for Billy Ltd

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Question - Billy Ltd acquired all the issued shares of Joel Ltd on 1 January 2022 for $36 000. At this date, the equity of Joel Ltd consisted of the following:

Share capital: 25,000

Retained earnings: 2,500

General reserve: 6,250

All the identifiable assets and liabilities of Joel Ltd were recorded at amounts equal to their fair values except for the following:

 

Carrying amount

Fair value

Inventories

6,000

8,000

Plant (cost $35,000)

25,000

26,000

Of the inventories on hand at 1 January 2022, 90% was sold by 30 June 2022. The remainder was sold by 30 June 2023. The plant was considered to have a further 2-year useful life with benefits to be received equally in each of those years. The tax rate is 30%.

Required -

1. Prepare the acquisition analysis at 1 January 2022.

2. Prepare the consolidation worksheet entries for Billy Ltd's group at 30 June 2022.

3. Prepare the consolidation worksheet entries for Billy Ltd's group at 30 June 2023.

4. Prepare the consolidation worksheet entries for Billy Ltd's group at 30 June 2024.

Reference no: EM132945920

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