1. Assuming all unrealised profit adjustments have been required as a result of Chandler Ltd selling inventory or plant and equipment to Joey Ltd, what is the post-acquisition contribution made by Chandler Ltd to the opening retained earnings of the Joey Ltd group?

	a.	$225,000
	b.	$95,000
	c.	$394,000
	d.	$130,000

2. Explain how and why you calculated the the post-acquisition contribution made by the subsidiary to the group in Q1?

Consolidated Entity $'000 5,430 601 3,684 664 09 ? ? 412 105 188 Consolidation worksheet for financial year ended 30 June 2021 Joey Chandler Adjustments Ltd Ltd Debit Ref Credit $'000 $'000 $'000 $'000 Sales revenue 4,360 1,570 500 f Less cost of goods sold Opening inventories 375 256 1 30 Add purchases 3,080 1,104 f 500 Less closing inventories 425 279 40 Cost of goods sold 3,030 1,081 Gross profit 1,330 489 Dividend revenue 70 0 70 j Management fee revenue 25 0 25 d Interest revenue 0 15 15 e Depreciation expense 245 187 20 Finance costs 98 e 15 Other expenses 325 79 20 c/d 25 Profit before tax 750 140 Tax expense 265 45 15.00 i/g/ 12.00 Profit after tax for the year 485 95 Retained earnings 1 July 2020 849 394 233 b/i/1 64 Dividends paid (53) (28) j 28 Dividends declared (107) (42) 42 Retained earnings 30 June 1,174 419 2021 Issued capital 400 400 b Revaluation surplus 190 0 Fair value adjustment 84 b/a 84 Shareholders' equity 2,114 819 Assets Cash 190 170 Accounts receivable 173 109 h 40 Dividends receivable 42 0 k 42 399 ? 313 ? 1,074 (53) (107) 1,411 750 750 190 ? 360 242 | | 190 84 b/a 84 Fair value adjustment Shareholders' equity Assets 2,114 819 ? Cash 190 170 360 173 109 40 242 42 0 42 425 279 40 664 640 0 640 0 250 250 450 120 1,669 Accounts receivable Dividends receivable Inventories Investment in Chandler Ltd Loan to Joey Ltd Land Buildings Accumulated depreciation Plant and equipment Accumulated depreciation Goodwill (net) Deferred tax asset 1,099 1,440 (475) 1,025 (275) 968 (525) 690 10 1 2,408 (1,000) 1,725 (595) 16 (290) 60 1 90 36 20 b/c g/1 35 25 36.00 18.00 78 Total assets 4,319 2,126 5,567 111 87 198 292 50 40 302 Less liabilities Current taxes payable Accounts payable Dividend payable Loan from Chandler Ltd Mortgage loan Deferred tax liabilities 107 42 42 107 250 * 0 250 1,255 1,100 2,355 254 190 28 a 36 Net assets 2,114 819 1,996.00 ? 1,996.00