Joan Ltd acquired 100% of the share capital of Jewel Ltd on 1 July 2011, for $356,000. At that date, the share capital and reserves of Jewel Ltd were:

	$
Share capital	200,000
Retained earnings	80,000
	280,000

At 30 June 2016, five years after acquisition, the following data has been extracted from their financial records:

	Joan Ltd		Jewel Ltd
	$		$
Sales	781,400		740,000
Cost of sales	(494,000)		(438,000)
Gross profit	287,400		302,000
Dividends received from Jewel Ltd	93,000		-
Management fee revenue	26,500		-
Gain on sale of plant	40,000		36,000
Expenses
Administrative expenses	(40,800)		(28,700)
Depreciation	(29,500)		(56,800)
Management fee expense	-		(26,500)
Other expenses	(125,100)		(86,000)
Operating profit before tax	251,500		140,000
Income tax expense	(75,500)		(42,000)
Operating profit after tax	176,000		98,000
Retained earnings 1 July 2015	319,400		239,200
Available for appropriation	495,400		337,200
Dividends paid	(137,400)		(93,000)
Retained earnings 30 June 2016	358,000		244,200
Equity
Retained earnings	358,000		244,200
Share capital	350,000		200,000
Current liabilities
Accounts payable	81,700		76,300
Tax payable	66,300		25,000
Non-current liabilities
Loans	152,500		120,000
	1,008,500		665,500
Current assets
Accounts receivable	55,400		84,500
Inventory	105,000		38,000
Non-current assets
Land and buildings	278,000		326,000
Plant - at cost	299,850		355,800
Less: Accumulated depreciation	(85,750)		(138,800)
Investment in Jewel Ltd	356,000		-
	1,008,500		665,500

Additional information:

(a)The identifiable net assets of Jewel Ltd were recorded at fair value at the date of acquisition, except for inventory that had a fair value which was $2,000 higher than its carrying amount, and an item of plant (cost $25,000 and accumulated depreciation of $15,000) that had a fair value of $19,000. This plant had a remaining useful life of 6 years, with no residual value. All of the inventory was sold by 30 June 2012, but the plant is still owned as at 30 June 2016.

(b)During the year ended 30 June 2016, Joan Ltd made inventory sales to Jewel Ltd of $42,000, while Jewel Ltd made inventory sales to Joan Ltd of $65,000.

(c)The closing inventory (at 30 June 2016) of Joan Ltd includes inventory acquired from Jewel Ltd at a cost of $33,000. This cost Jewel Ltd $20,000 to produce.

(d)The closing inventory (at 30 June 2016) of Jewel Ltd includes inventory acquired from Joan Ltd at a cost of $7,000. This cost Joan Ltd $5,000 to produce.

(e)The opening inventory of Joan Ltd (at 1 July 2015) included inventory acquired from Jewel Ltd for $20,000, that had cost Jewel Ltd $15,000 to produce. This entire inventory was sold by Joan Ltd to parties external to the group during the year ended 30 June 2016.

(f)On 1 July 2015, Jewel Ltd sold an item of plant to Joan Ltd for $116,000 when its carrying amount in Jewel Ltds financial statements was $80,000 (cost $135,000 less accumulated depreciation of $55,000). This plant is assessed as having a remaining useful life of 6 years, with no residual value.

(g)During the year ended 30 June 2016, Jewel Ltd paid management fees of $26,500 to Joan Ltd.

(h)The tax rate is 30%.

Required:

A.Prepare an acquisition analysis and the consolidation journal entries the year ending 30 June 2016 for the group comprising Joan Ltd and Jewel Ltd.

B. Prepared a consolidation worksheet for the year ending 30 June 2016.