Reference no: EM133179240

Question - On 1 July 2021 the equity of Steven Ltd consisted of share capital of $95 000 and retained earnings of $65 800. All the identifiable assets and liabilities of Steven Ltd were recorded at amounts equal to fair value except for:

	Carrying amount	Fair Value
Brand	$75 000	$85 000
Plant (cost $90,000)	50 000	59 000
Inventories	25 600	30 000

Chris Ltd acquired all the issued shares of Steven Ltd for $180 000 on 1 July 2021. The Brand was considered to have an indefinite life. It was estimated that the plant had a further life of 7 years and was depreciated on a straight-line basis. All the inventories were sold by 30 June 2022.

In May 2022, Steve Ltd transferred $23 500 from the retained earnings on hand at 1 July 2021 to a general reserve. In June 2022, Steve Ltd conducted an impairment test on the Band and on the goodwill acquired. As a result, the goodwill was considered to be impaired by $6 000 and brand by $6 500.

The tax rate is 30%.

Required -

1. Prepare the acquisition analysis at 1 July 2021.

2. Prepare the consolidation worksheet entries for Chris Ltd's group at 1 July 2021.

3. Prepare the consolidation worksheet entries for Chris Ltd's group at 30 June 2022.