INFORMATION:

Positive Ltd (Positive) acquired an 80% stake in Strong Ltd (Strong) on 1 January 20x1. The purchase consideration consisted of

- $2,600,000 cash paid immediately,

- 500,000 shares in Positive (worth $900,000)

- $1,505,200 payable on 31 December 20x1 should Strong increase its sales by 40% in the year ending on the same day. It was estimated that there was a 50% possibility of Strong attaining the required level of sales. The relevant rate of return is 6% per annum. (From this, contingent Liability/consideration is calculated to amount to $710,000) On the acquisition date, Strong had share capital and retained earnings of $2,500,000 and $1,200,000 respectively. Its net assets were carried at fair value in its financial statements except for the following: Building that had a carrying amount of $1,400,000 million was valued at $1,650,000 (revaluation gain of $250,000) Strong has an internally generated brand name that had been valued at $750,000 by market experts. This had not been recorded in the companys financial statements.

Positive group adopts the proportionate share of the fair value of the subsidiaries net identifiable assets in measuring any non-controlling interest.

The Investment in Strong on 1 January 20x1 is accounted for as follows:

Dr Investment in Strong Ltd	3,760,000
Dr Goodwill	450,000
Cr Cash		2,600,000
Cr Contingent Consideration		710,000
Cr Share Capital		900,000

Given the above information and the journal entry for Investment in Strong Ltd on 1 January 20x1, prepare the consolidation journal entry for Elimination of Investment in Strong Ltd for the year ended 31 December 20x2. (4 marks)