Question
Accounting for Associates: Cook Ltd acquired 20% interest in Town Ltd on 1 July 2020, for a cost of $350,000. All the identifiable net assets
Accounting for Associates: Cook Ltd acquired 20% interest in Town Ltd on 1 July 2020, for a cost of $350,000. All the identifiable net assets of Town Ltd at 1 July 2020 were recorded at fair values. For the year ended 30 June 2023, Town Ltd recorded an after-tax profit of $700,000. Town Ltd declared a final dividend of $10,000 on 5 June 2023 and paid an interim dividend of $1,000 on 28 September 2022. Town Ltd revalued its land, which gave rise to an asset revaluation surplus of $50,000 after tax on 30 May 2023. -For the year ended 30 June 2021 and 2022 (prior years), Town Ltd recorded after-tax profits of $830,000 and $500,000 and paid a final dividends of $25,000 in both years. Cook Ltd applies AASB 128/IAS 28 in accounting for its investment in Town Ltd. Cook Ltd is a parent entity and therefore prepares consolidated financial statements. The tax rate is 30%. Required: Prepare the consolidation worksheet entries to account for Cook Ltd's interest in Town Ltd for the year ended 30 June 2023, as per AASB128, Journal narrations are not required.
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