(a) Pofadder Company owns 100 per cent of Snake Ltd. On 1 July 2017 Pofadder Company sells an item of plant to Snake Ltd for $1.8 million. This plant cost Pofadder Company $2.25 million and had accumulated depreciation of $0.9 million at the date of the sale. The remaining useful life of the plant is assessed as 12 years and the tax rate is 30 per cent.

Required:

Provide the consolidation journal entries for 30 June 2018 to adjust for the above sale

(b) On 30 June 2018, Polly Ltd acquired all of the issued capital of Sally Ltd for a cost of $950 000. The statement of financial position of Sally Ltd was as follows:

Balance sheet of Sally Ltd as at 30 June 2018 $000 Current assets Cash 50 Accounts receivable 40 Inventory 110 Non-current assets Plant and equipment 720 Accumulated depreciation plant and equipment (120) Land 800 1 600 Current liabilities Accounts payable 100 Non-current liabilities Loan 500 Shareholders equity Share capital 700 Retained earnings 200 Revaluation surplus 100 1 600

Additional information

The plant and equipment of Sally Ltd has a fair value of $750 000. All other assets were recorded at fair value.

The tax rate is 30 per cent. Required: Prepare the consolidation worksheet journal entries on 30 June 2018