Based on the information provided below, appropriate consolidation journal entries for

possible account adjustment or elimination.

Reference appropriate accounting standards to explain the approach which needs to be taken for the adjusting journals.

Parent paid $110 000 on 30 June for all the shares of Subsidiary, whose equity at that date is share capital $72 000 and retained profits $28 000. However, the assets of Subsidiary are not all recorded at their fair value. Assume that all companies adopt the revaluation model under AASB 116. The discrepancies are:

Carrying Amount Fair Value

$ $

Investments 26 000 54 000

Accounts receivable 14 000 8 000

PPE 26 000 12 000

Inventory 70 000 76 000

Franchise Nil 10 000