All of the shares of WGA were acquired by FPK on 1 July 2021 and it is now 30 June 2023.

Required

Prepare the consolidation adjustment entries for 30 June 2023 for the following items including any tax adjustment. The tax rate is 30 %.

You should include relevant calculations/workings as your narration to each entry.

i. During the year, WGA Ltd paid a rental to FPK Ltd for warehouse space for $12000.

Consolidation Adjustment	DR	CR

ii. At acquisition date, the plant and machinery of WGA had a remaining life of 5 years depreciated on a straight-line basis.

Consolidation Adjustment	DR	CR

iii. In the prior year, the directors determined that impairment for goodwill of $10000 was appropriate. They have assessed the goodwill as fully impaired in 2022 and the balance is to be charged to goodwill impairment the current year.

Consolidation Adjustment	DR	CR

iv. During the current financial year, FPK Ltd had purchased inventory from WGA Ltd for $20000. This inventory had previously cost WGA Ltd $16000. One quarter of this inventory is still in the closing stock of FPK Ltd at the end of the year.

Consolidation Adjustment	DR	CR

v. WGA Ltd paid an interim dividend of $2000 to FPK Ltd on 1 February 2023, and declared a final dividend of $5500 on 27 June 2023, not yet paid at 30 June 2023. Both companies record dividends on an accrual basis.

Consolidation Adjustment	DR	CR

vi. WGA Ltd sold a forklift to FPK Ltd, on 1 January 2022 for $6000. The forklift had cost WGA Ltd $8000 when acquired on 1 July 2021 from an external party and depreciated prior to disposal to FPK. The forklift is classified as Plant & Machinery by both companies. Both parties depreciate assets at 20% pa on cost.

Consolidation Adjustment	DR	CR

vii. FPK Ltd acquired whitegoods from WGA Ltd to update the office kitchen on 1 July 2022 for $6000 (original cost to WGA $4500). These items are classified as Plant & Machinery by FPK Ltd and Inventory for WGA Ltd. The items are depreciated by FPK Ltd on a straight-line basis over 3 years.

Consolidation Adjustment	DR	CR

Flat Pack Kitchens Ltd (FPK) has a strategy to expand their operations to provide a complete kitchen solution for their customers. FPK have identified a complementary company, White Goods Australia Ltd (WGA). FPK is considering acquiring WGA Ltd.to guarantee quality of delivery times of this essential part of the kitchen solution. Statement of Financial Position As at 30 June 2021 (pre acquisition) FPK Ltd $'000 WGA Ltd $'000 Assets Cash Accounts receivable Inventory (at cost) Plant and machinery (at cost) Accumulated depreciation on plant and machinery Total assets Liabilities Bank Loan Accounts payable $ 112 000 18 000 43 000 75 000 (34000) $214 000 $ 24 000 20 000 27 000 80 000 (19 000) $132 000 120 000 42 000 162 000 $ 52 000 12 000 12 000 $ 120 000 Net Assets $ 40 000 Share capital 40 000 shares 90 000 shares General reserve Retained earnings Total Capital $ 90 000 10 000 20 000 120 000 12 000 52 000 Flat Pack Kitchens Ltd (FPK) has a strategy to expand their operations to provide a complete kitchen solution for their customers. FPK have identified a complementary company, White Goods Australia Ltd (WGA). FPK is considering acquiring WGA Ltd.to guarantee quality of delivery times of this essential part of the kitchen solution. Statement of Financial Position As at 30 June 2021 (pre acquisition) FPK Ltd $'000 WGA Ltd $'000 Assets Cash Accounts receivable Inventory (at cost) Plant and machinery (at cost) Accumulated depreciation on plant and machinery Total assets Liabilities Bank Loan Accounts payable $ 112 000 18 000 43 000 75 000 (34000) $214 000 $ 24 000 20 000 27 000 80 000 (19 000) $132 000 120 000 42 000 162 000 $ 52 000 12 000 12 000 $ 120 000 Net Assets $ 40 000 Share capital 40 000 shares 90 000 shares General reserve Retained earnings Total Capital $ 90 000 10 000 20 000 120 000 12 000 52 000