2:15 2018 10 Marks Term Part ACCT20073 Assignment Hahndorf Ltd acquired 100% of the shares of Sarina Ltd on 1 July 2015 for $700,000, when the equity of Sarina Ltd consisted of Share Capita $500,000 General Reserve 80,000 Retained Earnings 30,000 All identifiable assets and liabilities of Sarina Ltd were fairly valued at acquisition except the machinery, which had a fair value of S140,000. The machinery had a further 7-year life with depreciation based on the straight-line method. Selected financial information of the two entities as at 1 July 2015 were as follows: Hahndorf Ltd Sarina Ltd Retained earnings at 306/15 240,000 30,000 Share capita 700,000 500,000 General reserve 60,000 80.000 Total equity 1.000.000 610.000 Land 350,000 400,000 Machinery at cost Accumulated depreciation Equipment at cost Accumulated depreciation and impairment losses Cash 40,000 20,000 Investment in Sarina Ltd 700,000 - Inventory 40,000 35,000 Liabilities 130.000 60.000 Net assets1.000,000 610.000 240,000 (200,000) 250,000 (75,000) The company income tax rate is 30%. Required Prepare the consolidation journal entries resulting from the acquisition on 1 July 2015 as they will be carried forward as at 30 June 2018. (Tip: do the journals related to the revaluation of the machinery as they would have appeared on 1 July 2015 and then do all the consolidation journal entries related to the acquisition and the revaluation of the machinery as 30 June 2018, e. 3years later) (10 marks)