Case Scenario Antara Ltd operates in the construction industry and do not prepare consolidated financial statements Laura Jones is the senior accountant of the company, leading the financial reporting team As a result of being profitable for the last five years, on 1 July 2018, Antara Ltd acquired 25 of the issued ordinary shares of Blanca Ltd paying $198 000 in cash This provided Antara Ltd with the significant influence over Blanca Ltd At the acquisition date, Laura and her team received the information below for Blanca Ltd Equity comprised $180 000 share capital and $144 000 retained earnings All identifiable assets and liabilities were recorded at their carrying amounts equal to the fair values with the exceptions of three assets Inventory, Land, and Equipment CA FV Inventory 126000 153000 Land 162000 198000 Equipment 414000 432000 Other information related to the above assets includes Blanca Ltd sold all the inventory by 30 June 2020 After acquisition, Land was revalued by Blanca Ltd and revaluation was recognised in Blanca Ltd's own accounting book The company uses the revaluation model to account for its non current assets At 30 June 2019, Blanca Ltd had Land recorded at $252 000 fair value, and at 30 June 2020 at $288 000 fair value Blanca Ltd planned to use Equipment for another 5 years, using the straight line method of depreciation During two financial years following the acquisition, Antara Ltd and Blanca Ltd carried out the inter entity transactions below Antara Ltd sold a machine to Blanca Ltd for $85 000 The machine had a carrying amount of $79 600 at the time of sale on 1 January 2019 Blanca Ltd planned to use the machine for a further 3 year with depreciation based on the straight line method On 15 May 2019, Antara Ltd sold inventory to Blanca Ltd for $20 800 The inventory had cost Antara Ltd $10 000 Blanca Ltd sold half of the inventory externally by 30 June 2019 On 30 April 2020, Antara Ltd sold inventory to Blanca Ltd for $126 000 The profit before tax of this transaction was $14 400 Blanca Ltd sold 90 of the inventory externally by 30 June 2020 Blanca Ltd's balance of Retained earnings at 30 June 2019 was $306 000 Both companies apply the tax rate of 30 Laura approved the following consolidated statements of profit or loss and other comprehensive incomes for Antara Ltd and Blanca Ltd for the year ended 30 June 2020 She made a note that the statement for Antara Ltd does not include the financial results of Blanca Ltd prepared using the equity account method Accounts Revenues 900000 432000 Exp 504000 144000 PBT 396000 288000 IT exp 144000 90000 PAT 252000 198000 Other comprehensive income items Gains on NCA revaluation 54000 25200 Comprehensive R 306000 223200

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Case Scenario Antara Ltd operates in the construction industry and do not prepare consolidated financial statements. Laura Jones is the senior accountant of the company,

Case Scenario

Antara Ltd operates in the construction industry and do not prepare consolidated financial statements. Laura Jones is the senior accountant of the company, leading the financial reporting team. As a result of being profitable for the last five years, on 1 July 2018, Antara Ltd acquired 25% of the issued ordinary shares of Blanca Ltd paying $198 000 in cash. This provided Antara Ltd with the significant influence over Blanca Ltd.
At the acquisition date, Laura and her team received the information below for Blanca Ltd:

Equity comprised $180 000 share capital and $144 000 retained earnings.
All identifiable assets and liabilities were recorded at their carrying amounts equal to
the fair values with the exceptions of three assets: Inventory, Land, and Equipment.

CA FV

Inventory 126000 153000

Land 162000 198000

Equipment 414000 432000

Other information related to the above assets includes:

Blanca Ltd sold all the inventory by 30 June 2020.
After acquisition, Land was revalued by Blanca Ltd and revaluation was recognised in
Blanca Ltd's own accounting book.The company uses the revaluation model to account for its non-current assets. At 30 June 2019, Blanca Ltd had Land recorded at $252 000 fair value, and at 30 June 2020 at $288 000 fair value.
Blanca Ltd planned to use Equipment for another 5 years, using the straight line method of depreciation.

During two financial years following the acquisition, Antara Ltd and Blanca Ltd carried out the inter-entity transactions below.

Antara Ltd sold a machine to Blanca Ltd for $85 000. The machine had a carrying amount
of $79 600 at the time of sale on 1 January 2019. Blanca Ltd planned to use the machine
for a further 3-year with depreciation based on the straight line method.
On 15 May 2019, Antara Ltd sold inventory to Blanca Ltd for $20 800. The inventory had
cost Antara Ltd $10 000. Blanca Ltd sold half of the inventory externally by 30 June 2019.
On 30 April 2020, Antara Ltd sold inventory to Blanca Ltd for $126 000. The profit
before-tax of this transaction was $14 400. Blanca Ltd sold 90% of the inventory externally by 30 June 2020.

Blanca Ltd's balance of Retained earnings at 30 June 2019 was $306 000. Both companies apply the tax rate of 30%.

Laura approved the following consolidated statements of profit or loss and other comprehensive incomes for Antara Ltd and Blanca Ltd for the year ended 30 June 2020. She made a note that the statement for Antara Ltd does not include the financial results of Blanca Ltd prepared using the equity account method.

Accounts

Revenues 900000 432000

Exp 504000 144000

PBT 396000 288000

IT exp 144000 90000

PAT 252000 198000

Other comprehensive income items

Gains on NCA revaluation 54000 25200

Comprehensive R 306000 223200