Question

1

On 1st July 20X1 Baker Ltd acquired all the share capital of Portland Ltd for $100,000.

At that date equity of Portland Ltd was:

Share capital $85,000

Retained earnings $10,000

Additional information

Required: Complete the following integrated worksheet

Consolidation worksheet 30 June 20X2	Dr./Cr	Baker Ltd	Portland Ltd	Elimination		Consolidated Statement
				Dr	Cr
Revenue	Cr	300,000	130,000
Less: Expenses	Dr	150,000	88,000
Profit	Cr	150,000	42,000
Retained earnings 1-7-20X1	Cr	100,500	10,000
Retained earnings 30-06-20X2	Cr	250,500	52,000
Share capital	Cr	100,000	85,000
Non-current liabilities	Cr	50,500	7,000
Current liabilities	Cr	15,000	6,000
		416,000	150,000
Share in Portland Ltd	Dr	100,000
Other non-current assets	Dr	250,000	130,000
Current assets	Dr	66,000	20,000
		416,000	150,000

2

The accounts of the group entity, Star Ltd and Track Ltd, as 30 June, 20X2, show the following:

Intragroup sales during the year ended 30 June 20X2 were $20,000

Intragroup unrealised profit in inventory at 1st July 20X1 was $1,500

Intragroup unrealised profit in inventory at 30 June 20X2 was $1,000

Consolidation worksheet 30 June 20X2	Dr./Cr	Star Ltd	Track Ltd	Elimination		Consolidated Statement
				Dr	Cr
Sales	Cr	267,600	217,000
Inventory 1-7-20X1	Dr	28,000	19,000
Purchase	Dr	104,000	111,000
		132,000	130,000
Inventory 30-06-20X2	Cr	32,000	22,000
Retained earnings	Cr	5,000	4,000
Assets
Inventory	Dr	32,000	22,000

Required: Complete the elimination column in the extract from the worksheet for intragroup sales/purchase and unrealised profit in inventory.

3

On 1st July, 20X1 Vulcan Ltd acquired all the share capital of Woden Ltd for $220,000

At that date the equity of Woden Ltd was:

Share capital 200,000

General reserve 10,000

Retained earnings 4,000

Additional information

Intragroup sales during the year ended 30 June 20X2 were $64,000

Unrealised profit in intragroup inventory at 1st July 20X1 was $1,500

Unrealised profit in intragroup inventory at 30 June 20X2 was $8,000

Consolidation worksheet 30 June 20X2	Dr./Cr	Vulcan Ltd	WodenLtd	Elimination		Consolidated Statement
				Dr	Cr
Sales	Cr	267,600	217,000
Inventory 1-7-20X1	Dr	28,000	19,000
Purchase	Dr	104,000	111,000
		132,000	130,000
Inventory 30-06-20X2	Cr	32,000	22,000
Cost of goods sold	Dr	100,000	108,000
Gross profit	Cr	167,600	109,000
Expenses excluding finance cost	Dr	64,000	42,000
Finance cost	Dr	36,000	26,000
Total expenses	Dr	100,000	68,000
Profit before tax	Cr	67,600	41,000
Less: Income tax expenses	Dr	30,000	20,000
Profit	Cr	37,600	21,000
Retained earnings 1-7-20X1	Cr	5,000	4,000
Available retained earnings	Cr	42,600	25,000
Appropriation:
To General Reserve	Dr	5,000	23,000
Declared Dividend	Dr	25,000	-
Total appropriation	Dr	30,000	23,000
Retained earnings 30-06-20X2	Cr	12,600	2,000

Answer 1

		Baker Ltd	Portland Ltd	Elimination		Consolidated Statement
				Dr.	Cr.
Revenue	Cr	$300,000.00	$130,000.00			$430,000.00
Less: Expenses	Dr	$150,000.00	$88,000.00			$238,000.00
Profit	Cr	$150,000.00	$42,000.00			$192,000.00
Retained earnings 1-7-20X1	Cr	$100,500.00	$10,000.00	$10,000.00		$100,500.00
Retained earnings 30-06-20X2	Cr	$250,500.00	$52,000.00			$292,500.00
Share capital	Cr	$100,000.00	$85,000.00	$85,000.00		$100,000.00
Non-current liabilities	Cr	$50,500.00	$7,000.00			$57,500.00
Current liabilities	Cr	$15,000.00	$6,000.00			$21,000.00
		$416,000.00	$150,000.00			$471,000.00
Share in Portland Ltd	Dr	$100,000.00			$100,000.00
Other non-current assets	Dr	$250,000.00	$130,000.00			$380,000.00
Current Assets	Dr	$66,000.00	$20,000.00			$86,000.00
Goodwill on Consolidation	Dr			$5,000.00		$5,000.00
		$416,000.00	$150,000.00	$100,000.00	$100,000.00	$471,000.00