Corporate Accounting

ChallengeMe Pty Ltd acquired 100 per cent of the issued capital of TakeItEasy Ltd on 30

June 2018 for $900 000, when the statement of financial position of TakeItEasy Ltd was as follows:

Statementof financial position TakeItEasy Ltd as at 30 June 2018

1|Page question 2 ChallengeMe Pty Ltd acquired 100 per cent of the issued capital of TakeItEasy Ltd on 30 June 2018 for $900 000, when the statement of financial position of TakeItEasy Ltd was as follows: Statement of financial position TakeItEasy Ltd as at 30 June 2018 $('000) Assets Accounts receivable $('000) Liabilities Loan Inventory 70 100 Land 400 Shareholders' equity Property, plant and equip 700 Share Capital 500 Accumulated depreciation (270) Retained Earnings 200 1,000 300 1,000 Additional Information: Tax rate is 30 per cent As at the date of acquisition, all assets of TakeItEasy Ltd were at fair value, other than the property, plant and equipment, which had a fair value of $530 000. TakeItEasy Ltd adopts the cost model for measuring its property, plant and equipment. The property, plant and equipment is expected to have a remaining useful life of 10 years, and no residual value. One year following acquisition it was considered that TakeItEasy Ltd's goodwill had a recoverable amount of $60 000. TakeItEasy Ltd declared a dividend of $40 000 on 10 July 2018, with the dividends being paid from pre-acquisition retained earnings. The statements of financial position and statements of comprehensive income of ChallengeMe Pty Ltd and TakeItEasy Ltd one year after acquisition are as follows: Statement of financial position of ChallengeMe Pty Ltd and TakeItEasy LTd as at 30 June 2019 ChallengeMe Pty Ltd TakeItEasy Ltd ($000) ($000) 80 50 140 600 900 (300) 900 2,370 40 50 123 400 700 (313) 1,000 100 100 670 10 50 140 1,000 500 2,370 500 300 1,000 Assets Cash Accounts receivable Inventory Land Property Plant and equipment Accumulated depreciation Investment in Beach Ltd Total non-current assets Liabilities Accounts payable Dividends payable Loan Shareholders' equity Share capital Retained earnings Total shareholders' equity Reconciliation of opening and closing retained earnings Profit after tax 400 190 Retained earnings -- 30 June 2018 300 200 Interim dividend Final dividend Retained earnings -- 30 June 2019 (90) (40) (110) (50) 500 300 Required: Provide the consolidated accounts of ChallengeMe Pty Ltd and TakeItEasy Ltd as at 30 June 2019 with the following: Acquisition analysis show relevant calculations All relevant worksheet journal entries o Fair Value of assets adjustment o Pre-acquisition eliminating entries Consolidated worksheet for ChallengeMe Pty Ltd and its controlled entity for the period ending 30 June 2019 showing columns of Eliminations and adjustments and consolidated amounts Consolidated statement of financial position of ChallengeMe Group