Background info: Beer Ltd acquired 75% of the equity in Cider Ltd for $150 000 on 1 April 1999. Beer Ltd has provided you with the following general ledger account balances for the year ended 31 March 2016. Beer Ltd $ 522 500 410 000 112 500 50 000 Cider Ltd $ 275 000 197 000 78 000 18 000 62 500 50 000 50 000 60 000 40 000 15 000 62 500 Income statement/dividend items: Income (all types of income) Less expenses Profit before tax Less income tax expense Profit after tax Retained earnings - opening balance Less: dividends declared and paid Balance Sheet items: Retained earnings - closing balance Share capital Various liabilities Loan payable to Cider Ltd Bank loan Total equity and liabilities Receivables Inventory Loan receivable Non-current assets Investment in Cider Ltd 85 000 100 000 70 000 400 000 127 900 2 100 92 500 $685 000 40 000 120 000 30 000 $285 000 20 000 55 000 2 100 207 900 375 000 150 000 $685 000 Total assets $285 000 Additional information: Beer Ltd = Parent Cider Ltd = Subsidary (1) On 1 April 1999, the equity of Cider Ltd comprised: Share capital of $100 000 and Retained earnings of $30 000. The net assets of Cider Ltd were considered to. be fairly valued at the date of acquisition. (ii)The directors decided that the goodwill arising on consolidation has been further impaired by $4 000 at 31 March 2016. In previous years, the goodwill had been impaired by a total of $26 000. (iii) The non-controlling interest (NCI) is to be measured at fair value. (iv) Towards the end of March 2015, Cider Ltd had made sales to Beer Ltd amounting to $20 000. The inventory sold had cost Cider Ltd $15 000. The inventory of Beer Ltd as at 31 March 2015 included this purchase. Part A Required: (1) Prepare a Consolidation Worksheet, for the year ended 31 March 2016, in accordance with NZ IFRS 3 Business Combinations and NZ IFRS 10 Consolidated Financial Statements. You are not required to include your notional journal entries in the assignment answer booklet. (ii) Prepare the notional journal entry to recognise the NCI, but assume the directors wanted the NCI to be measured at the NCI's proportionate share of the Cider Ltd's identifiable net assets. Note: You must include your workings on each line of your notional journal entry. Part B For this part of the question, assume the net assets of Cider Ltd were not fairly valued at the date of acquisition. On 1 April 1999, Cider Ltd had a contingent liability of $5 000, an uprecognised internally generated intangible with a fair value of $12 000, and equipment with a book value of $45 000 that had a fair value of $52 000. The rest of the information provided is still relevant. Required: Prepare all the necessary notional journal entries required by NZ IFRS 3 Business Combinations and NZ IFRS 10 Consolidated Financial Statements to consolidate the financial statements of Beer Ltd and Cider Ltd for the year ended 31 March 2016. Background info: Beer Ltd acquired 75% of the equity in Cider Ltd for $150 000 on 1 April 1999. Beer Ltd has provided you with the following general ledger account balances for the year ended 31 March 2016. Beer Ltd $ 522 500 410 000 112 500 50 000 Cider Ltd $ 275 000 197 000 78 000 18 000 62 500 50 000 50 000 60 000 40 000 15 000 62 500 Income statement/dividend items: Income (all types of income) Less expenses Profit before tax Less income tax expense Profit after tax Retained earnings - opening balance Less: dividends declared and paid Balance Sheet items: Retained earnings - closing balance Share capital Various liabilities Loan payable to Cider Ltd Bank loan Total equity and liabilities Receivables Inventory Loan receivable Non-current assets Investment in Cider Ltd 85 000 100 000 70 000 400 000 127 900 2 100 92 500 $685 000 40 000 120 000 30 000 $285 000 20 000 55 000 2 100 207 900 375 000 150 000 $685 000 Total assets $285 000 Additional information: Beer Ltd = Parent Cider Ltd = Subsidary (1) On 1 April 1999, the equity of Cider Ltd comprised: Share capital of $100 000 and Retained earnings of $30 000. The net assets of Cider Ltd were considered to. be fairly valued at the date of acquisition. (ii)The directors decided that the goodwill arising on consolidation has been further impaired by $4 000 at 31 March 2016. In previous years, the goodwill had been impaired by a total of $26 000. (iii) The non-controlling interest (NCI) is to be measured at fair value. (iv) Towards the end of March 2015, Cider Ltd had made sales to Beer Ltd amounting to $20 000. The inventory sold had cost Cider Ltd $15 000. The inventory of Beer Ltd as at 31 March 2015 included this purchase. Part A Required: (1) Prepare a Consolidation Worksheet, for the year ended 31 March 2016, in accordance with NZ IFRS 3 Business Combinations and NZ IFRS 10 Consolidated Financial Statements. You are not required to include your notional journal entries in the assignment answer booklet. (ii) Prepare the notional journal entry to recognise the NCI, but assume the directors wanted the NCI to be measured at the NCI's proportionate share of the Cider Ltd's identifiable net assets. Note: You must include your workings on each line of your notional journal entry. Part B For this part of the question, assume the net assets of Cider Ltd were not fairly valued at the date of acquisition. On 1 April 1999, Cider Ltd had a contingent liability of $5 000, an uprecognised internally generated intangible with a fair value of $12 000, and equipment with a book value of $45 000 that had a fair value of $52 000. The rest of the information provided is still relevant. Required: Prepare all the necessary notional journal entries required by NZ IFRS 3 Business Combinations and NZ IFRS 10 Consolidated Financial Statements to consolidate the financial statements of Beer Ltd and Cider Ltd for the year ended 31 March 2016