Additional information:

a) On 1 July 2014, A Ltd acquired 75% of the contributed equity of Z Ltd. At that date the equity of Z Ltd comprised: Contributed equity $225 000 Retained earnings $55 140 Revaluation reserve $43 500

b) At the time acquisition, all assets were considered to be fairly valued.

c) During the year, Z Ltd made sales to A Ltd amounting to $126 750; Z Ltd had always sold goods to A Ltd at a mark-up of 25% on cost.

d) Inventory at 30 June 2018 was as follows: A Ltd $63 600 Z Ltd $41 700

e) Of the inventory A Ltd had on hand at 30 June 2017, $18 900 was purchased from Z Ltd.

f) Of the inventory A Ltd had on hand at 30 June 2018, $23 100 was purchased from Z Ltd.

g) Z Ltds administrative expenses include $32 250 paid to A Ltd for providing management and administrative service for the year.

h) On 30 June 2018, the directors decided that goodwill arising on the acquisition on A Ltd had been impaired by 40%.

i) On 30 June 2018, a final dividend amounting to $42 000 was provided by A Ltd, while $30 000 was provided by Z Ltd, and the decision to pay the dividend communicated to shareholders on that date. A Ltd has recognised its share of the dividend receivable from Z Ltd in its financial statements on 30 June 2018.

j) Tax is charged at a rate of 40%.

Required: (a) Complete the acquisition analysis on 1 July 2014 for A Ltds investment in Z Ltd as required by AASB3 and AASB10 and determine the amount of goodwill or gain on bargain purchase following the partial/proportional goodwill method.

(b) Prepare the acquisition journal entries on 1 July 2014.

(c) Prepare all consolidated journal entries including non-controlling interest and their posting to consolidated worksheet for the year ended 30 June 2018 for consolidation purpose of A Ltd and Z Ltd.

The financial statements of A Ltd and Z Ltd at 30 June 2018 are set as follows: A Ltd Z Ltd Statement of Comprehensive Income Income: Opening inventory 44 550 Purchases Closing inventory 1076 907 63 600 1 057 857 64 800 756 428 41 700 779 528 1113 300 333 772 Cost of sales Sales revenue Gross profit Other Income Dividend income Administration fee 1 445 100 387 243 66 000 33 750 32 250 519 243 312 543 185 319 29 040 98 184 Expenses: 333 772 222 772 142 567 23 460 Admin and other expenses Depreciation 56 745 111 000 206 700 46 431 Other expenses Profit before tax Tax exp. Profit/surplus after tax Dividends proposed & paid Retained carnings for the year Statement of Financial Position 160 269 60 000 100 269 36 630 74 370 45 000 29 370 Equity and liabilities: Statement of Financial Position Equity and liabilities: 405 000 Contributed capital Revaluation surplus Retained earnings 166 755 Long-term loan 225 000 75 000 154 170 139 545 44319 36 630 30 000 38 505 Accounts payable Taxation payable 46 431 Dividends payable 42 000 698 691 704 664 Assets: Non-current assets 232 016 588 902 Investment in Z Limited Inventory 257 730 63 600 50 175 22 500 72 670 41 700 68 413 Accounts receivable Dividends receivable Cash 5 649 698 691 704 664