Consolidation Journal Entries Dean Ltd acquired all the issued share capital of Diane Ltd on 1 January 2012 for cash $200,000 On the acquisition date, the equity of Diane Ltd is consisted of Share capital $125,000 General reserve $31,250 Retainedearnings $25,000 AlltheidentifiableassetsandliabilitiesofDianeLtdwererecordedatfairvalueexceptforsomedepreciableplantandmachinery,whichhadacarryingamountof$106,250(cost$125,000)andfairvalueof112,500 Theremainingusefullifewas10years ThefairvalueadjustmentswouldbemadeonconsolidationratherthanonDianesownaccountingbook Additionalinformationshows Duringthecurrentperiod,DeanLtdsoldinventorytoDianeLtdfor$25,000 ThishadoriginallycostDeanLtd$22,750tomanufacture By31December2016,DianesoldhalfoftheinventorytoBritLtdfor$15,388 DeanLtdsopeninginventoryincludesinventorypurchasedfromDianeLtdfor$109,000 TheinventoryhadoriginallycostedDianeLtd$89,000topurchase At1January2016,DianeLtdsoldamachinetoDeanLtdfor$180,000 ThisitemhadacarryingamountattimeofsaletoDianeLtdof$120,000(originalcost$200,000,accumulateddepreciation$80,000) Theremainingusefullifeofthemachineis12yearsforbothentities DeanLtdprovidedcomputerservicescost$36,000toDianeLtdduringthecurrentfinancialyear At31December2016,$3,000remainedunpaid On1January2015,DianeLtdsoldaplanttoDeanLtdfor$22,000 DianeLtdrecordedaprofitof$8,000beforetax Theremainingusefullifewas10yearsatthetimeofthisintra grouptransaction Diane Ltd declared final dividend of $10,000 from its current years profit Goodwill had been impaired by 10 in the first year following the acquisition During the year ended 31 December 2016 it was considered that the goodwill has been further impaired by an amount of $3,000 The tax rate is 30 Required Prepare all necessary consolidation adjusting journal entries for the year ended 31 December 2016, according to the requirements of AASB 10 Consolidation Financial Statements (no narrations required for journal entries), assuming the financial year for Dean Ltd and Diane Ltd is as same as the calendar year

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Consolidation Journal Entries Dean Ltd acquired all the issued share capital of Diane Ltd on 1 January 2012 for cash $200,000. On the acquisition date,

Consolidation Journal Entries

Dean Ltd acquired all the issued share capital of Diane Ltd on 1 January 2012 for cash $200,000. On the acquisition date, the equity of Diane Ltd is consisted of:

Share capital - $125,000
General reserve - $31,250
Retainedearnings-$25,000
AlltheidentifiableassetsandliabilitiesofDianeLtdwererecordedatfairvalueexceptforsomedepreciableplantandmachinery,whichhadacarryingamountof$106,250(cost$125,000)andfairvalueof112,500.Theremainingusefullifewas10years.ThefairvalueadjustmentswouldbemadeonconsolidationratherthanonDianesownaccountingbook.Additionalinformationshows:
2. Duringthecurrentperiod,DeanLtdsoldinventorytoDianeLtdfor$25,000.ThishadoriginallycostDeanLtd$22,750tomanufacture.By31December2016,DianesoldhalfoftheinventorytoBritLtdfor$15,388.
3. DeanLtdsopeninginventoryincludesinventorypurchasedfromDianeLtdfor$109,000.TheinventoryhadoriginallycostedDianeLtd$89,000topurchase.
4. At1January2016,DianeLtdsoldamachinetoDeanLtdfor$180,000.ThisitemhadacarryingamountattimeofsaletoDianeLtdof$120,000(originalcost$200,000,accumulateddepreciation$80,000).Theremainingusefullifeofthemachineis12yearsforbothentities.
5. DeanLtdprovidedcomputerservicescost$36,000toDianeLtdduringthecurrentfinancialyear.At31December2016,$3,000remainedunpaid.
6. On1January2015,DianeLtdsoldaplanttoDeanLtdfor$22,000.DianeLtdrecordedaprofitof$8,000beforetax.Theremainingusefullifewas10yearsatthetimeofthisintra-grouptransaction.

Diane Ltd declared final dividend of $10,000 from its current years profit.
Goodwill had been impaired by 10% in the first year following the acquisition. During the year ended 31 December 2016 it was considered that the goodwill has been further impaired by an amount of $3,000.
The tax rate is 30%.

Required:

Prepare all necessary consolidation adjusting journal entries for the year ended 31 December 2016, according to the requirements of AASB 10 Consolidation Financial Statements (no narrations required for journal entries), assuming the financial year for Dean Ltd and Diane Ltd is as same as the calendar year.