Reference no: EM132746291

Problem - Father Ltd acquires Son Lid for a cash consideration of $1.2m on 30 June 2022. All assets of Son Ltd. presented above on 30 June 2022 are fairly valued. At 30 June 2022 Son Ltd. had Patent (fair value 250000) that was internally developed identifiable intangible assets.

Following is the statement of financial positions of both companies:

	Father Ltd	Son Ltd
Current assets
Cash	20,000	10,000
Accounts receivable	300,000	110,000
Non-current assets
Plant	1,400,000	1,000,000
Land	400,000	200,000
Investment in Son Ltd	1,200,000	-
	3,320,000	1,320,000
Current liabilities
Accounts payable	120,000	60,000
Non-current liabilities
Loans	800,000	300,000
Shareholders' equity
Share capital	2,000,000	400,000
Retained earnings	400,000	560,000
	3,320,000	1,320,000

Required -

a) Provide the consolidated statement of financial position for Father Lid and Son Ltd as at 30 June 2022.

b) Provide consolidation adjustment journal entry to eliminate the investment in Son Ltd.