(a) Explain to a friend of yours, who is struggling to understand accounting issues related to NCIS, "How does the existence of the NCI affect the business combination valuation entries? (b) Trinity Ltd acquired 70% of the issued shares of Walter Ltd for $480 000 on 1 July 2018. At this date, the equity of Walter Ltd consisted of $450 000 share capital and $198 000 retained earnings. All the identifiable assets and liabilities of Walter Ltd were recorded at amounts equal to fair value. The fair value of the non-controlling interest was $ 198 000. Trinity Ltd uses the full goodwill method. The following annual results were reported by Walter Ltd following the business combination: Year ended Profit/(loss) Other items of comprehensive income 30 June 2019 $50 000 $4900 30 June 2020 75 000 8600 The other items of comprehensive income relate to the gains on land of Walter Ltd that are recorded at fair value under the revaluation method of measurement The acquisition analysis as on 1 July 2018 is: Net fair value of identifiable assets and liabilities of Walter Ltd = ($450 000 + $198 000) (equity) = $648 000 (a) Consideration transferred = $480 000 (b) Non-controlling interest = $198 000 Aggregate of (a) and (b) = $678 000 Goodwill = $678 000 - $648 000 = $30 000 Goodwill of Walter Ltd Fair value of Walter Ltd = $198 000/0.3 = $660 000 Fair value of INA of Walter Ltd = $648 000 Goodwill of Walter Ltd = $12 000 Goodwill of Trinity Ltd Goodwill acquired Goodwill of Walter Ltd Control premium = $30 000 = $12 000 = $18 000 Required: Prepare the consolidation worksheet entries for the preparation of consolidated financial statements of Trinity Ltd for the year ending 30 June 2020. Must show all calculations. (a) Explain to a friend of yours, who is struggling to understand accounting issues related to NCIS, "How does the existence of the NCI affect the business combination valuation entries? (b) Trinity Ltd acquired 70% of the issued shares of Walter Ltd for $480 000 on 1 July 2018. At this date, the equity of Walter Ltd consisted of $450 000 share capital and $198 000 retained earnings. All the identifiable assets and liabilities of Walter Ltd were recorded at amounts equal to fair value. The fair value of the non-controlling interest was $ 198 000. Trinity Ltd uses the full goodwill method. The following annual results were reported by Walter Ltd following the business combination: Year ended Profit/(loss) Other items of comprehensive income 30 June 2019 $50 000 $4900 30 June 2020 75 000 8600 The other items of comprehensive income relate to the gains on land of Walter Ltd that are recorded at fair value under the revaluation method of measurement The acquisition analysis as on 1 July 2018 is: Net fair value of identifiable assets and liabilities of Walter Ltd = ($450 000 + $198 000) (equity) = $648 000 (a) Consideration transferred = $480 000 (b) Non-controlling interest = $198 000 Aggregate of (a) and (b) = $678 000 Goodwill = $678 000 - $648 000 = $30 000 Goodwill of Walter Ltd Fair value of Walter Ltd = $198 000/0.3 = $660 000 Fair value of INA of Walter Ltd = $648 000 Goodwill of Walter Ltd = $12 000 Goodwill of Trinity Ltd Goodwill acquired Goodwill of Walter Ltd Control premium = $30 000 = $12 000 = $18 000 Required: Prepare the consolidation worksheet entries for the preparation of consolidated financial statements of Trinity Ltd for the year ending 30 June 2020. Must show all calculations