7103AFE Corporate Accounting Workshop questions Consolidation: Controlled and wholly owned subsidiaries Question 1 What is a subsidiary? Question 2 What are the key elements of control? Question 3 On 1 July 2013, Pyxis Ltd acquired all the share capital of Gemini Ltd for $218,500. At this date, Gemini Ltd's equity comprised: Share Capital 100 000 shares General reserve All identifiable assets and liabilities of Gemini Ltd were recorded at fair value as at 1 July 2013 except for the following: Carrying Amount Fair Value Inventory 5 27,000 5 35,000 Land 75,000 90,000 Equipment (cost $100,000) 50,000 60,000 o The equipment is expected to have a further 10year life. a The inventory was sold by June 2014. o The tax rate is 30%. o On 30 June 2014, the directors of Gemini Ltd decided to transfer $25,000 from the general reserve to retained earnings. m Prepare the consolidation worksheet entries for the preparation of consolidated nancial statements for Pyxis Ltd and its subsidiary Gemini Ltd as at: 1) 1 July 2013 2) 30 June 2014