Consolidation worksheet entries, multiple subsidiaries, acquisitions on the same date  LO3 On 1 July 2018, Canada Ltd acquired 80% of the issued shares of China Ltd and China Ltd acquired 75% of the issued shares of Chile Ltd. All shares were acquired on a cum div. basis. The equity of China Ltd and Chile Ltd at 1 July 2018 consisted of the following items. China Ltd Chile Ltd Share capital $80 000 $60 000 Asset revaluation surplus 5 000 — Retained earnings 1 000 4 000 Dividend payable 8 000 5 000 At 1 July 2018, all identifiable assets and liabilities of China Ltd and Chile Ltd were recorded at fair value. No goodwill or gain on bargain purchase arose in any of the acquisitions. The financial statements of the three companies at 30 June 2020 contained the following information. Canada Ltd China Ltd Chile Ltd Share capital $130 000 $80 000 $60 000 Asset revaluation surplus — 5 000 — Retained earnings (1/7/19) 10 000 10 500 13 000 Dividend payable 13 000 8 000 6 000 Profit 4 000 2 000 1 500 The dividends payable refer to dividends declared out of profits for the year ended 30 June 2020. Since 1 July 2018, the following intragroup transactions have occurred.

(a) China Ltd sold to Chile Ltd an item of machinery for $12 000 on 31 December 2018. The machinery had originally cost China Ltd $14 000 and at the time of sale had been depreciated to $11 200. Chile Ltd charges depreciation at 10% p.a. straight‐line on this machinery.

(b) During the year ended 30 June 2020, inventories were sold by Chile Ltd to China Ltd at 25% mark-up on cost. Inventories for which China Ltd paid $4000 to Chile Ltd are included in the inventories of China Ltd as at 30 June 2020. The tax rate is 30%. Required Prepare the consolidation worksheet entries for the year ended 30 June 2020.