Provide all the necessary consolidation worksheet entries

Reference no: EM133017334

Question: Brisbane Ltd (BL) acquired 90% of the capital of Springfield Ltd for $145,080 on 1 July 2037. The equity of Springfield Ltd at this date consisted of:

Share capital $100,000
Retained earnings 40,000

The carrying amounts and fair values of the assets and liabilities recorded by Springfield Ltd at 1 July 2037 were as follows:

Carrying amount Fair value
Inventories $ 5,000 $ 6,000
Land 45,000 50,000
Machinery (net) 100,000 110,000

All inventories on hand at 1 July 2037 are sold by 30 June 2038. The machinery has a further 10-year life beyond 1 July 2037, with benefits to be received evenly over this period. Differences between carrying amounts and fair values are recognised in the consolidation worksheet.
Brisbane Ltd uses the partial goodwill method. Springfield Ltd made an after-tax profit of $20,000 for the year ended 30 June 2038.

Required

1. Calculate the NCI share of the BCVR (Business Combination Valuation Reserve) on the day of acquisition.

2. Calculate the NCI share of profit for the year ended 30 June 2038.

3. Provide all the necessary consolidation worksheet entries to account for the NCI (non-controlling interest) for the financial year ended 30 June 2038.

Reference no: EM133017334

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