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Prepare the consolidation worksheet entries for the year

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Question - On 1 July 2019 Shark Ltd acquired 100% of the share capital of Whale Ltd for $470,000. On that date, the shareholders' equity of Whale Ltd consisted of share capital and retained earnings, which were:

Share Capital (100,000 shares) $400,000

Retained Earnings $100,000

On 1 July 2019, all the assets and liabilities of Whale Ltd were recorded at amounts equal to fair value except for Plant which had a fair value of $60,000 and a carrying amount of $45,000 (original cost $62,500). The remaining useful life of the Plant at date of acquisition is 5 years.

Whale Ltd paid a dividend of 10¢ per share in 2019/20 and 12¢ per share in 2020/21. No other dividends had been paid by Whale Ltd. Assume a tax rate of 30%.

Required -

-Prepare the acquisition analysis at 1 July 2019.

-Prepare the consolidation worksheet entries for the year ended 30 June, 2021.

Reference no: EM133006726

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