[:5 *- Exercise 28.12 CONSOLIDATION WORKSHEET WITH PRE-ACQUISITION EQUITY TRANSFERS AND INTRAGROUP TRANSACTIONS 0n 1 January 2014, Olivia Ltd acquired all the share capital of Chloe Ltd for $300 000. The equity of Chloe Ltd at I January 2014was: Share capital $200 000 Retained earnings 50 000 General reserve 20 000 At this date, all identifiable assets and liabilities of Chloe Ltd were recorded at fair value. Goodwill is tested annually for impairment. By 31 December 2017, no impairment has occurred. At 1 January 2014, no goodwill had been recorded by Chloe Ltd. 0n 1 May 2017, Chloe Ltd transferred $15 000 from the general reserve (ore-acquisition) to retained earnings. The tax rate is 30%. The following information has been provided about transactions between the two entities. a. The beginning and ending inventories of Olivia Ltd and Chloe Ltd in relation to the current period ended on 31 December 201? included the following inventories transferred intragroup. olrvla- Ltd chine Ltd Beginning inventories: Transfer price $2 000 $1 zoo Original cost 1 4oo Boo Ending inventories: Transfer price 500 goo Original cost goo :roo Olivia Ltd sold inventories to Chloe Ltd during the current period for $3000. This was $500 above the cost of Olivia Ltd sold inventories to Chloe Ltd during the current period for $3000. This was $500 above the cost of the inventories to Olivia Ltd. Chloe Ltd sold inventories to Olivia Ltd in the current period for $2500, recording a pre-tax profit of $800. J. Olivia Ltd sold an inventories item to Chloe Ltd on 1 July 201? for use as machinery. The item cost Olivia Ltd $4000 and was sold to Chloe Ltd for $6000. Chloe Ltd depreciated the item at a rate of 10% p.a. on a straight-line basis. :2. On 31 December 201?, Chloe Ltd owes Olivia Ltd $1000 for items sold on credit. 1. Chloe Ltd undertook an advertising campaign for Olivia Ltd during the period ended 31 December 201?. Olivia Ltd was charged and paid $8000 to Chloe Ltd for this service. 3. Olivia Ltd received dividends totalling $63 000 during the current period ended 31 December 201? from Chloe Ltd. These dividends were declared in the current period out of post-acquisition prots. wired 1. Prepare the acquisition analysis at 1 january 2014. 2. Prepare the business combination valuation entries and pre-acquisition entries at 1 January 2011;. 3. Prepare the business combination valuation entries and pre-acquisition entries at 31 December 201?. 5. Prepare the consolidation worksheet journal entries to eliminate the effects of intragroup transactions at 31 December 2017