Dictate Caption Emphasis Heading 1 Heading 2 Heading 3 Heading 4 Styles Pane Part B NASH Ltd acquired total (100%) share capital of MASH Ltd on 1 April 2019 when the balance on the retained earnings stood at $50,000. The following are extracts from the income statements of the two companies for the year ended 31" March 2020. NASH Ltd MASH Ltd. $000's $000's Sales 700 400 Cost of Sales (400) (180) Operating expenses (100) (90) Tax (20) (20) Profit after tax 180 110 Statement of Financial Positions as at 31 March 2020 is as follows NASH Ltd MASH Ltd. $000's $000's Assets Property, plant and equipment 400 300 Investments in Subsidiary 280 Inventories 80 30 Accounts receivable 40 10 Cash and bank 10 _5 Total assets 810 345 Equity and abilities $1 Equity shares Retained earnings Loan Accounts payable Total equity and liabilities 500 190 70 50 810 110 160 35 40 345 Additional information is also provided 1. On 1 April 2019 MASH Ltd. revalued Land in its property, plant and equipment upwards by $30,000 for the purpose of acquisition. All other assets were recorded at fair value at the date of the purchase 2. During the current financial year, NASH Ltd made inter-company sales of $20,000 to MASH Ltd. MASH Ltd. still had $5,000 of these sales in its inventory on hand at 31 March 2020. The profit amount included in this remaining inventory is $2,000 3 As of 31 March 2020. goodwill on acquisition is considered to be impaired by $3,000 for the current year. MASH Ltd. includes a trade receivable of 3,000 from NASH Ltd as at 31" March 2020. Focus Page 17 of 21 ACTY6201- Financial Accounting REQUIRED (1) Prepare the notional journal entries (including entry for calculating goodwill and taking control) required for above adjustments in consolidation accounts for the year ended 31st March 2020. [8 marks] Notional Consolidation Journals Debit Credit Property, plant and equipment MASH Ltd 30,000 Cost of control/ Consolidated reserve 30,000 (Adjustment of the fair value of property, plant and equipment) 20