Reference no: EM132547477

Question - You are the accountant for Gin Ltd Gin Limited purchased all the equity of Kind Limited on 30 June 2019. At that time the carrying value of the net assets of Kind Ltd was $1 200 000. This amount was made up in equity as follows: share capital $1 000 000; retained earnings $200 000. Kind Ltd has held some valuable land for a long time (purchased at $ 1 200 000), but has not revalued it. Its fair value at 30 June 2019 was $2 800 000 (all other non-current assets are recorded at fair value). Gin Ltd paid cash consideration of $3 000 000 for Kind Ltd. You can assume that the land has not been revalued in the controlled entity's books.

As the accountant you are required to prepare the elimination entries to reflect the purchase of Kind Limited.