Step $1$: Read the following scenario

Wholesale Ltd acquired $80$ per cent of the shares of House Construction Ltd on $30$ June $2020$ for a consideration of $$800,000.$ The share capital and reserves of House Construction Ltd at the date of acquisition were:

Share capital $$550,000$

Retained earnings $$100,000$

Revaluation surplus $$150,000.$

All assets of House Construction Ltd were fairly valued at the date of acquisition, except for a major plant that had a fair value $$26,000$ greater than its carrying amount. The cost of the plant was $$100,000$ and it had accumulated depreciation of $$85,000.$ There were no

transactions between Wholesale Ltd and House Construction Ltd at the date of acquisition. In addition, Wholesale Ltd acquired $100$ per cent of the shares of Queensland Retail Ltd on $1$ July $2018$that is two years earlier. The cost of investment was $$650,000.$ At that date the capital and reserves of Queensland Retail Ltd were:

Share capital $$235,000$

Retained earnings $$115,000.$

At the date of acquisition, all assets of Queensland Retail Ltd were considered to be fairly valued. Wholesale Ltd incurred the following transactions with Queensland Retail Ltd during the financial year $20182019$:

On $1$ September $2018$ Wholesale Ltd sold machinery to Queensland Retail Ltd for $$136,000$ when its carrying value in Wholesale Ltd$$s book was $$100,000($original cost $$200,000$ and original estimated life of $8$ years$).$

From January to June in $2019,$ Wholesale Ltd made sales of inventory $$50,000$ to Queensland Retail Ltd for on$-$sale to external parties. The inventory had originally cost Wholesale Ltd $$40,000.$ On $30$ June $2019,$ Queensland Retail Ltd still had $40$ per cent of the inventory on hand. On$-$hand inventory was expected to be sold in the subsequent financial year.

Wholesale Ltd incurred the following transactions with Queensland Retail Ltd during the financial year $20192020$:

During the year Wholesale Ltd made total sales of inventory $$70,000$ to Queensland Retail Ltd for on$-$sale to external parties. The inventory had originally cost Wholesale Ltd $61,000.$ On $30$ June $2020,$ half of the inventory was still on hand. On$-$hand inventory was expected to be sold in the subsequent financial year.

Wholesale Ltd provided management consultation to Queensland Retail Ltd and this was the first time that Wholesale Ltd provided such service to Queensland Retail Ltd$.$ At the end of $2020,$ Queensland Retail Ltd paid $$3,000$ for these services and has a balance of $$2,000$ payable at year$-$end.

Queensland Retail Ltd has several long$-$term loans, including a five$-$year loan for $$55,000$ from Wholesale Ltd$.$ This loan was effective from $1$ July $2019.$ The interest rate was $3\mathrm{.}5\%$ per annum. During the year ending $30$ June $2020,$ Queensland Retail Ltd paid $$1,000$ interest on this loan.

Step $2$: Based on the scenario, prepare the following:

You were appointed as the financial accountant at Wholesale Ltd$.$ As you may have noticed, Wholesale Ltd acquired $80\%$ shares of House Construction Ltd to extend its operation in Australia and it also has an existing wholly$-$owned subsidiary $($Queensland Retail Ltd$)$ operating in Queensland.

You were requested to prepare the following:

acquisition analysis at $1$ July $2018$ and adjustment$/$elimination journal entries for consolidation as of $30$ June $2019$

acquisition analysis and adjustment$/$elimination journal entries for consolidation as of $30$ June $2020.$

After meeting with your supervisor, you gathered the following information that you might need to complete your work:

Wholesale Group Ltd has the following accounting policies for the economic entity:

Revaluation adjustments on acquisition are to be made on consolidation only, not in the books of any subsidiary.

Plant and machinery are depreciated using the straight$-$line method with no residual value. For part$-$years, depreciation is to be calculated on the number of months the asset is held in the relevant year.

All calculated amounts are to be rounded to the nearest whole dollar. Companies in the group do not show cents in any journals, worksheets, or financial statements.

Wholesale Ltd measures any non$-$controlling interests $($NCI$)$ at fair value.

The management team of Wholesale Ltd believes that goodwill acquired from the business combination was impaired by $$10,000$ in $2019$ and $$15,000$ in $2020.$

Wholesale Ltd declared and paid dividends of $$250,000$ on $30$ June $2019.$ Queensland Retail Ltd did not declare and distribute dividends to its shareholders for the financial year $20182019.$

Wholesale Ltd declared dividends of $$200,000$ and paid dividends of $$150,000$ on $30$ June $2020.$ Queensland Retail Ltd declared and paid dividends of $$50,000$ on $30$ June $2020.$

The company tax rate is $30\%$ and this rate has not changed for several years.

Reporting date is $30$ June.

Journal narrations are required.

Number each year consolidation elimination$/$adjusting journal entries by $1,2,3,...,$ etc. Where more than one journal entry is needed for an event to be completely accounted for, add the letters a$,$ b$,$ c$,...,$ etc. to them as