ACCT2201 GROUP CASE STUDY SEMESTER 2 2020 On 1 July 2013 Tony Ltd acquired all of the share capital (cum div)of Claire Limited for a consideration of $600,000 cash and a brand with a fair value of $50,000. At the date of acquisition Claire's accounts showed a dividend payable of $8,000. At acquisition date all the identifiable assets and liabilities were recorded at fair value with the exception of: ASSET Book Value Inventory 10,000 Land 80,000 Market Value 14,000 85,000 19,000 18,000 Plant (less depn) Acounts Receivable 16,000 (2000) 14,000 20,000 The inventory was all sold by 30/6/14. The remaining useful life of the plant is 5 years. The accounts receivable were collected by 30/6/14 for $18,000. The land was sold on 30/12/16 for $90000. The plant was on hand still at 30/6/17. At the date of acquisition the equity of Claire Ltd consisted of: Information from the trial balances of Claire Ltd and Tony Ltd at 30 June 2017 is presented overleaf. Additional Information 1. On 1 Jan 2017 Tony Ltd sold inventory to Claire Ltd costing $60,000 for $75,000. Half of this inventory was sold to outside parties by 30/6/17. 2. On 1 Jan 2016 Tony Ltd sold inventory costing $9000 to Claire Ltd for $16,000. Claire Ltd treats the item as equipment and depreciates it at 10% per annum. 3.On 1 July 2016 Tony sold plant to Claire for $21,000. The plant had cost Tony $24,000 on 1 July 2014 and it was being depreciated at 10% per annum. Claire regards the plant as inventory. The inventory was all sold by 30th July 2016. 4. At 1 July 2016 Tony Ltd held inventory that it had purchased from Claire Ltd on 1 June 2016 at a profit of $9000. All inventory was sold by 30 June 2017 5. Claire Ltd accrues dividends from Tony Ltd once they are declared. 6. Claire Ltd has earned $1200 in interest revenue in the 2017 financial year from Tony Ltd. 7. Claire Ltd has earned $3800 in service revenue in the 2017 financial year from Tony Ltd. 8. Assume a tax rate of 30%. Required: A. Prepare the acquisition analysis at 1 July 2013. B. Prepare the BCVR and pre-acquisition journal entries at 1 July 2013. C. Prepare the BCVR and pre-acquisition journal entries at 30 June 2017. D. Prepare the consolidation worksheet journal entries to eliminate the effects of Share Capital General Reserve Retained Earnings 420,000 90,000 70,000 inter-entity transactions as at 30 June 2017. E. Prepare the consolidation worksheet for the preparation of the consolidated financial statements for the period ended 30 June 2017. F. Prepare the consolidated statement of profit or loss and other comprehensive income, the consolidated balance sheet and the consolidated statement of changes in equity for the period ended 30 June 2017. Presentation Your work should be prepared using an Excel spreadsheet and saved as a PDF to be submitted via LMS by the due date. Trial Balances As at 30 June 2017 Tony Ltd Claire Ltd DR CR DR CR Sales Revenue 1,247,100 952,500 Cost of Sales 788,000 456,000 Wages and Salaries 161,000 72,000 Depreciation Expense 17,000 8,000 Service Expense 3,500 4,800 Interest Expense 9,300 5,600 Other Expenses 4,000 6,000 Gain on Sale of Non Current Asset - 7,000 Service Revenue 5,600 5,000 Interest Revenue 1,200 7,000 Dividend Revenue 5,500 - Income tax expense 97,120 118,480 Retained Earnings 1/7/16 190,820 61,280 Dividend Paid 10,000 3,000 Dividend Declared 12,000 2,500 Share Capital 500,000 420,000 General Reserve 155,000 67,100 Other Equity 1/7/16 4,000 12,000 Gains on Financial Assets (OCI) 1,000 6,000 Loan Payable to Tony Ltd - 16,000 Deferred Tax Liability 54,900 6,600 Dividend Payable 12,000 2,500 Shares in Claire Ltd 642,000 - Cash 86,000 147,500 Inventories 169,500 36,000 Other Current Assets 11,000 300,000 Dividend Receivable 2,500 - Loan receivable from Claire Ltd 16,000 - Financial Assets 15,000 68,000 Plant and Equipment 74,300 228,000 Acc. Depreciation Plant 12,600 12,900 Land 71,500 120,000 2,189,720 2,189,720 1,575,880 1,575,880

an ACT, CROUP CASE STUDY SEMESTER Z 2020 On 1 y 2013 Tony ltd squired all of the share capital ou divja Caire Limited for a consideration of S800.0cash and a brand with a fair value of $50,000 At the site of acquisition Claire's accounts showed a lind pyle of 8,000 At acquisition date all the identifiable assets and abilities were recorded at tsir se with the exception of ASSET Book Value Market value 10.000 14.000 Past 16,000 sep 120.00 14,000 19.000 counts Receivable 20,000 The inventory was alsold by 3/6/14 The remaining useful We of the plant is Syeurs The accounts receivable were collected by 30/6/14 for $18,000 The land was sold os 30/12/16 for $9.000. The plant was on hand til at 30/6/17. At the date of acquisition the equity of Care Ltd constiedot Share Capital 430,000 General Reserve 70.000 Information from the trial balances al Care Lad and Tony Ltd at June 2017 is presented will Additional Information 1. On 1 Jan 2017 Tony Lid sold invertory to Care Lid costing 560.000 for $7.000. Hall of this mentory was sold to build parties by 30/4/17. 2.On 1 2016 Tany ltd oldinventory conting 6000 to Caire Ltd for $1.000. Claire Ltd treats the temper and deprecies 20 m 14 2014 and it was being depreciated at 2 per amun.Clare regards the plantas vertory 2016 Tony sold plant to Claire For $2.000. The planet had cast Tony 534,000 on The nigry was alsold by 30th July 2016 4. At 1 July 2016 Tony Lad held inventory that it had purchased from Claire Lad online 2016 aprofit of $2000. All inventory was told by 20 lune 2017 5. Caire Licores dividends from Tony Ltd once they are declared 6.Care Lod has earned $1200 is interest reverse in the 2017 Financial year from TonyLI. 5. Care Lodhin med 800 in service in the 2017 financial year from Tony Ltd. A. Prepare the acquisition analysis any 2013 Prepare the CR and pre-acquisition journalistluly 2013 Prepare the CVR and pre-acquisition journal entries at 20 June 2017 D. Prepare the consolidation worksheet Journal entries to eliminate the effects of interentky transactions as at 30ne 2017 My and it was being deprecated near Gremade the givena Theory 2006 4. Aly 2008 Tory Lad held inventory that it had purchased from Celis online 2016 at a proto 52000. Alimentary was wild by 20 2017 Care Lodra from any day dede & cores and $1200 were reverse the 2017 yewoon 7. Claire Led his cared 5 never the 2007 na parron Tony Let me of Prepare the only 2003 Prepare the CVR and pre-acquisition journalist 2011 Prepare the love and parties journal 2017 Deprecatel retresele eelle nerently reactions 2017 Prepare the consolidation worksheet for the preparan al he came francia statements for the period anded in 2017. Precedent of proterodother compressive none The acted bloce sheet and the conditerent of changes inquiety for the period ended ure007 Your work should be prepared reprehet reeds Probe bied wat by the due date DR Trax AI Tory Led De 12 788.DE 16.00 1700 CR 952 Costales 450.000 72.000 1000 9.500 4.00 3.600 E.DOC Deprecisan pe serepes Internet Other Salon Sale TV ALLE SR instve Dwiedes 5 L.200 7 000 5091 2.000 120 11829 21.120 81280 DOOD 13.000 1.000 2.SO ered a 1/1/18 Dividend Puld fancy Sere Other guity 1/7/16 Gaison Financial can word Derd Dividend Payable Shan Cained 135.000 4000 17.30 22. DOO 5000 16001 1.500 2.500 54.900 12.000 GO000 143 38.000 100.000 Other Curtis Dwided Race 1.300 11.00 2. 16 15.00 74.300 B2.000 TA Put and Lauren RRE Depreciation Plant lan 320 1200 T. 2. 120 1.511 2.212.720 2.535881 ACCT2201 GROUP CASE STUDY SEMESTER 2 2020 On 1 July 2013 Tony Ltd acquired all of the share capital (cum div)of Claire Limited for a consideration of $600,000 cash and a brand with a fair value of $50,000 At the date of acquisition Claire's accounts showed a dividend payable of $8,000 At acquisition date all the identifiable assets and liabilities were recorded at fair value with the exception of: ASSET Inventory Land Plant (less depn) Market Value 14,000 85,000 Book Value 10,000 80,000 16,000 (2000) 14,000 20,000 19,000 18,000 Acounts Receivable The inventory was all sold by 30/6/14. The remaining useful life of the plant is 5 years. The accounts receivable were collected by 30/6/14 for $18,000. The land was sold on 30/12/16 for $90000. The plant was on hand still at 30/6/17. At the date of acquisition the equity of Claire Ltd consisted of: Share Capital General Reserve Retained Earnings 420,000 90,000 70,000 Information from the trial balances of Claire Ltd and Tony Ltd at 30 June 2017 Juul Capital General Reserve Retained Earnings 420,000 90,000 70,000 Information from the trial balances of Claire Ltd and Tony Ltd at 30 June 2017 is presented overleaf. Additional Information 1. On 1 Jan 2017 Tony Ltd sold inventory to Claire Ltd costing $60,000 for $75,000. Half of this inventory was sold to outside parties by 30/6/17. 2. On 1 Jan 2016 Tony Ltd sold inventory costing $9000 to Claire Ltd for $16,000. Claire Ltd treats the item as equipment and depreciates it at 10% per annum. 3.On 1 July 2016 Tony sold plant to Claire for $21,000. The plant had cost Tony $24,000 on 1 July 2014 and it was being depreciated at 10% per annum. Claire regards the plant as inventory. The inventory was all sold by 30th July 2016. 4. At 1 July 2016 Tony Ltd held inventory that it had purchased from Claire Ltd on 1 June 2016 at a profit of $9000. All inventory was sold by 30 June 2017 5. Claire Ltd accrues dividends from Tony Ltd once they are declared. 6. Claire Ltd has earned $1200 in interest revenue in the 2017 financial year from Tony Ltd. 7. Claire Ltd has earned $3800 in service revenue in the 2017 financial year from Tony Ltd. 8. Assume a tax rate of 30%. Required: A. Prepare the acquisition analysis at 1 July 2013. B. Prepare the BCVR and pre-acquisition journal entries at 1 July 2013. C. Prepare the BCVR and pre-acquisition journal entries at 30 June 2017 D. Prepare the consolidation worksheet journal entries to eliminate the effects of come the consolidated balance sheet and the consolidated statement of changes in equity for the period ended 30 June 2017. Presentation Your work should be prepared using an Excel spreadsheet and saved as a PDF to be submitted via LMS by the due date. Trial Balances As at 30 June 2017 Tony Ltd Claire Ltd DR CR DR 1,247,100 CR 952,500 788,000 161,000 17,000 3,500 9,300 4,000 456,000 72,000 8,000 4,800 5,600 6,000 5,600 1,200 5,500 7,000 5,000 7,000 Sales Revenue Cast of Sales Wages and Salaries Depreciation Expense Service Expense Interest Expense Other Expenses Gain on Sale of Non Current Asset Service Revenue Interest Revenue Dividend Revenue Income tax expense Retained Earnings 1/7/16 Dividend Paid Dividend Declared Share Capital General Reserve Other Equity 1/7/16 Gains on Financial Assets (OC) Loan Payable to Tony Ltd Deferred Tax Liability Dividend Payable Shares in Claire Ltd 97,120 118,480 190,820 61,280 10,000 12,000 3,000 2,500 500,000 155,000 4,000 1,000 420,000 67,100 12,000 6,000 16,000 6,600 2,500 54,900 12,000 642,000 4,000 1,000 12,000 6,000 16,000 6,600 2,500 54,900 12,000 Other Equity 1/7/16 Gains on Financial Assets (OCI) Loan Payable to Tony Ltd Deferred Tax Liability Dividend Payable Shares in Claire Ltd Cash Inventories Other Current Assets Dividend Receivable Loan receivable from Claire Ltd Financial Assets Plant and Equipment Acc. Depreciation Plant Land 147,500 36,000 300,000 642,000 86,000 169,500 11,000 2,500 16,000 15,000 74,300 68,000 228,000 12,600 12,900 71,500 2,189,720 120,000 1,575,880 2,189,720 1,575,880