Case 3: Consolidation worksheet, previously held investment in subsidiary (5%) On 1 August 2018, Eco Ltd acquired 10% of the shares in Fico Ltd for $8000. Eco Ltd used the fair value method to measure this investment with movements in fair value being recognised in profit or loss. At 1 July 2017, the fair value of this investment was $15 400. The original investment in Fico Ltd was due to the fact that Fico Ltd was undertaking research into particular microbiological elements that could influence the profitability of Eco Ltd. With the continuing success of this research, Eco Ltd decided to acquire the remaining shares (cum div.) in Fico Ltd. On 1 July 2017, Eco Ltd made an offer to buy the remaining shares in Fico Ltd for $151 000 cash. This offer was accepted by the shareholders of Fico Ltd. On 1 July 2017, immediately after the business combination, the statement of financial position of Fico Ltd was follows: Share capital General reserve Retained earnings Total equity Dividend payable Other liabilities Total liabilities Total equity and liabilities Eco Ltd 130,000 56,500 93,500 280,000 25,000 75,000 100,000 380,000 Fico Ltd 90,000 12,000 36,000 138,000 12,600 25,000 37,600 175,600 20,600 20,000 8,000 Cash Receivables Other assets Shares in Fico Ltd Inventories Plan and equipment Accumulated depreciation Total assets 11,000 25,200 10,000 153,800 55,000 210,000 85,000 380,000 42,000 107,000 22,000 175,600 On analysing the financial statements of Fico Ltd, Eco Ltd determined that all the assets and liabilities recorded by Fico Ltd were shown at amounts equal to their fair values except for: Fair value Plant and equipment (cost $46000) Inventories Carrying amount $ 35 000 42 000 $43000 46 000 The plant and equipment is expected to have a further 4-year life and is depreciated on a straight line basis. The inventory was all sold by 30 June 2018 Fico Ltd had expensed all the outlays on research and development. Eco Ltd placed a fair value of $12 000 on this asset. Fico Ltd also had reported a contingent liability at 30 June 2017 in relation to claims by customers for damaged goods, Eco Ltd placed a fair value of $3000 on these claims. The research and development is amortised evenly over a 10-year period. The claims by customers were settled in May 2018 for $2800. . The company tax rate is 30%. Required (a) Prepare the consolidated financial statements of Eco Ltd at 1 July 2017, immediately after the business combination. (b) Prepare the consolidation worksheet entries at 30 June 2018