Consolidation with differences between carrying amount and fair value at acquisition date, impairment of goodwill and intragroup transactions  LO1, 2, 3, 4, 5, 6, 7 Financial information for Kaija Ltd and its 100% owned subsidiary, Helena Ltd, for the period ended 31 December 2020 is provided below. Kaija Ltd Helena Ltd Sales revenue $25 000 $23 600 Dividend revenue 1 000 0 Gain on sale of property, plant and equipment 1 000 2 000 Other income 1 000 2 000 Total income 28 000 27 600 Cost of sales 21 000 18 000 Other expenses 3 000 1 000 Total expenses 24 000 19 000 Profit before income tax 4 000 8 600 Income tax expense 1 350 1 950 Profit for the period 2 650 6 650 Retained earnings (1/1/20) 6 000 3 000 8 650 9 650 Interim dividend paid 2 500 1 000 Retained earnings (31/12/20) 6 150 8 650 Kaija Ltd acquired its shares in Helena Ltd at 1 January 2020 for $20 000 on a cum div. basis. At that date, Helena Ltd recorded share capital of $10 000. Helena Ltd had declared prior to the acquisition a dividend of $3000 that was paid in March 2020. At 1 January 2020, all identifiable assets and liabilities of Helena Ltd were recorded at fair value except for inventories, for which the carrying amount was $400 less than fair value. Some of the inventories have been a little slow to sell, and 10% of it is still on hand at 31 December 2020. Inventories on hand in Helena Ltd at 31 December 2020 also includes some items acquired from Kaija Ltd during the period ended 31 December 2020. These were sold by Kaija Ltd for $5000, at a profit before tax of $1000. Half of the goodwill on acquisition of Helena Ltd by Kaija Ltd was written off as the result of an impairment test on 31 December 2020. During March 2020, Kaija Ltd provided some management services to Helena Ltd at a fee of $500 paid by 31 December 2020. On 1 July 2020, Helena Ltd sold machinery to Kaija Ltd at a gain of $2000. This machinery had a carrying amount to Helena Ltd of $20 000, and was considered by Kaija Ltd to have a further 5-year useful life. By 31 December 2020, the financial assets acquired by Kaija Ltd and Helena Ltd from external entities increased in value by $1000 and $650 respectively with gains and losses being recognised in other comprehensive income. The income tax rate is 30%. Required 1. Prepare the acquisition analysis at 1 January 2020. 2. Prepare the business combination valuation entries and pre-acquisition entries at 1 January 2020. 3. Prepare the business combination valuation entries and pre-acquisition entries at 31 December 2020. 4. Prepare the consolidation worksheet journal entries to eliminate the effects of intragroup transactions at 31 December 2020. 5. Discuss the concept of ‘realisation’ using the intragroup transactions in this question to illustrate the concept. 6. Prepare the consolidation worksheet for the preparation of the consolidated financial statements for the period ended 31 December 2020. 7. Prepare the consolidated statement of profit or loss and other comprehensive income for Kaija Ltd and its subsidiary, Helena Ltd, at 31 December 2020.