- I am having difficulties in completing a detailed consolidation worksheet for this question. Could I have help in explaining how the numbers are gathered? I have some similar answers to an already answered question on this, yet differ on others, so I am hoping to get a more detailed answer so that I can see where I may have gone wrong. Appreciate any assistance!

At 30 June 2022, three years after acquisition, the accounts of the two companies appear as follows: Sales Cost of sales Opening inventory 1 July 2021 Purchases Closing inventory 30 June 2022 Gross profit Depreciation expenses Administrative expenses Financial expenses Selling expenses Total expenses Other income Dividend revenue Interest revenue Rent revenue Total other income Operating profit before tax Income tax expense Operating profit after tax Retained earnings 1 July 2021 Available for appropriation Interim dividend paid Final dividend proposed Dividends paid and proposed Retained earnings 30 June 2022 Tornado Ltd $ 290 000 25 000 150 000 175 000 20 000 155 000 135 000 21 000 28 000 30 000 22 000 101 000 34 000 7 000 2 000 5 000 14 000 48 000 17 000 31 000 45 000 76 000 12 000 28 000 40 000 36 000 Cyclone Ltd $ 105 000 11 000 65 000 76 000 10 000 66 000 39 000 9 000 12 000 8 000 4 000 33 000 6 000 3 000 3 000 9 000 3 000 6 000 15 000 21 000 3 000 4 000 7 000 14 000 Share capital General reserve Creditors Dividends payable 10% debentures Other liabilities Assets Cash at bank Accounts receivable Deposits Inventory Dividend receivable Debentures - Cyclone Ltd Investment in Cyclone Ltd Plant and equipment Accumulated depreciation Land and buildings Accumulated depreciation Other assets 250 000 20 000 30 000 28 000 60 000 424 000 3 000 40 000 20 000 4 000 20 000 200 000 106 000 (64 000) 100 000 (10 000) 5 000 424 000 100 000 40 000 5 000 4 000 30 000 5 000 198 000 5 000 30 000 60 000 10 000 80 000 (15 000) 28 000 198 000 Additional information: a) The identifiable net assets of Cyclone Ltd were recorded at fair value at the date of acquisition. b) The directors have determined that there has been no impairment in the value of goodwill in the year ended 30 June 2022. However, goodwill impairment losses of $20 000 were recorded for consolidation purposes in the year ended 30 June 2021. c) During the year, Cyclone Ltd paid rent of $5 000 to Tornado Ltd. This expense is recorded in Cyclone's accounts under the 'Administrative expenses' heading. d) An item of plant and equipment owned by Tornado Ltd (cost of $20 000 and accumulated depreciation of $4 000) had been sold to Cyclone Ltd for $18 000 on 30 June 2021. Tornado had depreciated this asset at 20% per annum straight-line on original cost. Assuming no change in the total economic life of the plant and equipment, Cyclone has applied a 25% depreciation rate (straight-line) from the date of transfer of the asset. e) The opening inventory of Tornado Ltd includes unrealised profit of $1 000 on inventory transferred from Cyclone during the prior financial year. All of this inventory was sold by Tornado to parties external to the group during the year ended 30 June 2022. f) During the current financial year, Tornado sold inventory to Cyclone for $20 000. This inventory had previously cost Tornado $16 000. During the year, one-half of this inventory was sold by Cyclone to parties external to the group. g) Tornado hold two-thirds of the debentures issued by Cyclone. Interest at the rate of 10% has been paid on these debentures during the year. Interest expense is recorded in Cyclone's accounts under the 'Financial expenses' heading. h) On 15 January 2022, Cyclone paid an interim dividend of $3 000 to Tornado. i) Cyclone declared a final dividend of $4 000 on 15 June 2022. Tornado ha recognised this dividend as a receivable at 30 June 2022. j) The tax rate is 30%