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9 . 1 Calculate Left Ltd ' s share of profits in Right Ltd for the year ended 3 0 June 2 0 2 3

9.1
Calculate Left Ltd's share of profits in Right Ltd for the year ended 30 June 2023.
The following information is relevant to questions 9.1 and 9.2.
Left is a parent company that prepares consolidated financial statements. On 1 July 2021 Left
Ltd acquired 40% of the equity in Right Ltd for $220000. At this date the equity in Right Ltd
consisted of:
Right Ltd carried its assets fair values with the exception of one item of plant & equipment
whose fair value was $20000 greater than its carrying amount. The estimated useful life of this
item is 4 years. Summary of movements in the retained earnings of Right Ltd:
At 30 June 2022 there were unrealised profits before tax of $10000 arising from inventory
transfers between the two entities.
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