Undervalued assets, partial goodwill method, intragroup transactions   LO3, 4, 5, 6 On 1 July 2018, Mallee Ltd acquired 80% of the issued shares (cum div.) of Fowl Ltd for $166 400. At this date, the equity of Fowl Ltd consisted of: Share capital $120 000 General reserve 24 000 Retained earnings 16 000 At 1 July 2018, one of the liabilities of Fowl Ltd was a dividend payable of $10 000. This dividend was paid on 1 September 2018. One of the assets recorded by Fowl Ltd was goodwill of $5000. Mallee Ltd uses the partial goodwill method. At 1 July 2018, all the identifiable assets and liabilities of Fowl Ltd were recorded at amounts equal to their fair values except for the following. Carrying amount Fair value Plant (cost $100 000) $80 000 $ 88 000 Land 60 000 80 000 Inventories 40 000 52 000 In relation to these assets, the following information is available. • The plant had an expected useful life of 4 years. • Land is revalued in the records of Fowl Ltd at acquisition date. The land on hand at 1 July 2018 was sold by Fowl Ltd on 8 February 2020. On sale any related asset revaluation surplus is transferred to retained earnings. • The inventories were all sold by 30 June 2019. Additional information • During the period ended 30 June 2019, Fowl Ltd transferred $8000 from the general reserve existing at 1 July 2018 to retained earnings. • At 30 June 2019, Fowl Ltd recognised gains on revaluation of land of $6000 in other comprehensive income for the period. • In June 2019, Fowl Ltd sold inventories to Mallee Ltd for $7000. The inventories had originally cost Fowl Ltd $5000. 20% of these inventories remained unsold by Mallee Ltd at 30 June 2019. • During the 2019–20 period ended 30 June 2020, Fowl Ltd sold inventories to Mallee Ltd for $120 000. At 30 June 2020, Mallee Ltd holds inventories sold to it by Fowl Ltd for $20 000 which had cost Fowl Ltd $15 000. • On 1 January 2020, Fowl Ltd sold an inventories item to Mallee Ltd at a before‐tax profit of $5000. The original cost of this item to Fowl Ltd is $10 000. This asset was classified as plant by Mallee Ltd and depreciated over a 5‐year period. • The tax rate is 30%. • Financial information provided by the companies at 30 June 2020 was as follows. Mallee Ltd Fowl Ltd Sales revenue $ 910 000 $ 624 000 Other revenue 60 000 65 600 Total revenue 970 000 689 600 Cost of sales (625 000) (464 000) Other expenses (225 000) (129 600) Total expenses 850 000 593 600 Profit before tax 120 000 96 000 Tax expense (30 000) (32 000) Profit for the period 90 000 64 000 Retained earnings at 1 July 2019 100 000 48 000 Transfer from asset revaluation surplus — 14 000 Transfer to general reserve — (12 000) Dividend paid (20 000) (12 000) Dividend declared (30 000) (6 000) Retained earnings at 30 June 2020 140 000 96 000 Share capital 400 000 120 000 General reserve — 28 000 Asset revaluation surplus — 10 000 Total equity 540 000 254 000 Provisions $ 40 000 $ 30 000 Payables 30 000 40 000 Deferred tax liabilities 12 000 15 000 Non‐current liabilities 83 000 65 000 Total liabilities 165 000 150 000 Total equity and liabilities $ 705 000 $ 404 000 Mallee Ltd Fowl Ltd Shares in Fowl Ltd $ 158 400 — Plant 800 000 $ 320 000 Accumulated depreciation — plant (544 000) (120 000) Land 60 000 90 000 Intangible assets 75 000 60 000 Deferred tax assets 15 000 8 000 Cash 20 000 5 000 Receivables 40 600 6 000 Inventories 80 000 30 000 Goodwill — 5 000 Total assets $ 705 000 $ 404 000 Required Prepare the consolidation worksheet for the preparation of consolidated financial statements for Mallee Ltd at 30 June 2020.