Cherry Ltd purchased 100% of the shares of Durian Ltd on 1 July 2018 for $155,000. At that date the equity of Durian Ltd was as follows:

Share capital 60,000 shares	$ 60,000
General reserve	36,000
Retained earnings	21,000

At acquisition date, all the identifiable assets and liabilities of Durian Ltd were recorded at amounts equal to fair value except for:

	Carrying amount	Fair value
Machinery (cost = $17,000)	$15,000	$16,000
Equipment (cost = $30,000)	24,000	32,000
Inventory	50,000	57,000
Land	18,480	24,480

The tax rate is 30%

Additional information relating to the acquisition:

1. The machinery, which had a further 5-year life on acquisition date, was sold on 1 January 2021.
2. The equipment was estimated to have a further 8-year life.
3. The inventory held by Durian Ltd at 1 July 2018 were sold by 31 December 2018.
4. The land on hand was sold by 1 March 2020.
5. On 30 June 2021, half of the goodwill was written off as a result of an impairment test.
6. Valuation adjustments are made on consolidation.

Additional information relating to intragroup transactions:

1. On 1 July 2020, Durian Ltd has inventory on hand of $12,000 transferred from Cherry Ltd in June 2020. The inventory had previously cost Cherry Ltd $11,800. By 30 June 2021, Durian Ltd had sold all $12,000 of the inventory to external parties.
2. On 1 January 2021, Cherry Ltd acquired $15,000 worth of inventory for cash from Durian Ltd. The inventory had previously cost Durian Ltd $11,000. By 30 June 2021, Cherry Ltd had sold $11,250 of the transferred inventory for $16,000 to external entities.
3. On 1 January 2020, Durian Ltd sold equipment to Cherry Ltd for $8,000. This had originally cost Durian Ltd $12,000 and had a carrying amount at the time of sale of $7,000. Both entities charge depreciation on the straight-line basis at 10% per year.
4. On 1 January 2021, Cherry Ltd sold an item of inventory to Durian Ltd for use as machinery. This item cost Cherry Ltd $4,000 and was sold to Durian Ltd for $6,000. Durian Ltd depreciated the item on the straight-line basis at 10% per year.
5. On 1 February 2021, Durian Ltd paid an interim dividend of $2,000. Durian Ltd declared a final dividend of $3,000 in June 2021 that is still to be paid. Shareholder approval is not required in relation to dividends.
6. In March 2020, Cherry Ltd made an interest free loan of $10,000 to Durian Ltd that remains outstanding at 30 June 2021.
7. On 30 June 2021, the trial balances of Cherry Ltd and Durian Ltd were as follows:

   	Cherry Ltd	Durian Ltd
   Debit balances
   Shares in Durian Ltd	$155,000	$0
   Inventory	171,580	70,320
   Other current assets	8,620	3,100
   Deferred tax assets	16,200	7,400
   Machinery	28,000	22,000
   Land	0	24,480
   Equipment	34,000	37,300
   Cost of sales	65,000	53,500
   Other expenses	22,000	27,000
   Income tax expense	7,200	2,000
   Interim dividend paid	4,000	2,000
   Final dividend declared	10,000	3,000
   Advance to Durian Ltd	10,000	0
   	531,600	252,100
   Credit balances
   Share capital	170,000	60,000
   General reserve	41,000	36,000
   Retained earnings (1/7/20)	33,800	35,500
   Debentures	120,000	0
   Final dividend payable	10,000	3,000
   Current tax liabilities	8,000	2,500
   Other payables	34,800	10,100
   Advance from Cherry Ltd	0	10,000
   Sales	85,000	65,000
   Other revenue	19,000	21,000
   Gains/(losses) on sale of non-current assets	4,000	1,000
   Accumulated depreciation machinery	4,000	2,000
   Accumulated depreciation equipment	2,000	6,000
   	531,600	252,100

Required:

1. Determine the goodwill as at acquisition date. (3 marks)
2. Prepare the consolidation journal entries immediately after acquisition on 1 July 2018. (5 marks)
3. Prepare the consolidation journal entries as at 30 June 2021. (14 marks)
4. Prepare the consolidation worksheet for the preparation of the consolidated financial statements as at 30 June 2021. (7 marks)
5. Prepare the following financial statements for 30 June 2021:
   1. Consolidated statement of profit or loss and other comprehensive income (2 marks);
   2. Consolidated statement of financial position (2 marks); and
   3. Consolidated statement of changes in equity (2 marks).