Jonathan Ltd acquired all the issued shares (ex-div.) of Thomas Ltd on 1 July 2020 for $246000. At this date the equity of Thomas Ltd consisted of: Share capital $ 130000 General reserve 50000 Retained earnings 40500 At the acquisition date all the identifiable assets and liabilities of Thomas Ltd consisted of: Carrying amount Fair value Plant (cost $230000) $ 200000 $ 210000 Land 100000 120000 Inventories 30000 38000 The inventories were all sold by 30 June 2020. The land was sold on 1 February 2021 for $150000. The plant was considered to have a further 5-year life. The plant was sold for $155000 on 1 January 2022. Also, at acquisition date Thomas Ltd had recorded a dividend payable of $7000 and goodwill (net of accumulated impairment losses of $13000) of $5000. Thomas Ltd had not recorded some internally generated brands that Jonathan Ltd considered to have a fair value of $12000. The brand was considered to have an indefinite life. Also not recorded by Thomas Ltd was a contingent liability relating to a current court case in which Thomas Ltd was involved and a supplier was seeking compensation. Jonathan Ltd placed a fair value of $15000 on this liability. This court case was settled in May 2022 at which time Thomas Ltd was required to pay damages of $16000. ACC705 ACC705 CORPORATE ACCOUNTING AND REPORTING T123 PAGE 10 OF 15 *AUSTRALIAN INSTITUTE OF BUSINESS AND MANAGEMENT PTY LTD ABN: 72 132 629 979 CRICOS 03171A In February 2021, Thomas Ltd transferred $20000 from the general reserve on hand at 1 July 2020 to retained earnings. A further $15000 was transferred in February 2022. Both companies have an equity account entitled Other components of equity to which certain gains and losses from financial assets are taken. At 1 July 2021, the balances of these accounts were $30000 (Jonathan Ltd) and $15000 (Thomas Ltd). The financial statements of the two companies at 30 June 2022 contained the following information: Jonathan Ltd Thomas Ltd Revenues 90000 64000 Expenses 34000 42000 Trading profit 56000 22000 Gains (losses) on sale of non-current assets 8000 8000 Profit before tax 64000 30000 Income tax expense 12000 5000 Profit for the period 52000 25000 Retained earnings (1/7/21) 103000 55000 Transfer from general reserve 30000 15000 185000 95000 Dividend paid 20000 0 Retained earnings (30/6/22) 165000 95000 Share capital 150000 130000 General reserve 10000 20000 Other components of equity 25000 18000 Total equity 350000 263000 Accounts payable 40000 10000 Deferred tax liability 18000 10000 Other non-current liabilities 250000 230000 Total liabilities 308000 250000 Total equity and liabilities 658 000 513000 Plant 430000 320000 Accumulated depreciation plant (182000) (220000) Land 150000 20000 Brands 80000 0 Shares in Thomas Ltd 246 000 Financial assets 110000 107000 Cash 10000 5000 Inventories 40000 30000 Goodwill 20000 18000 Accumulated impairment losses 0 (13000) Total assets 658000 513000 Required 1. Calculate acquisition analysis as at 1 July 2020 2. Prepare the consolidation journal entries for 30 June 2022 3. Complete the consolidated worksheet for 30 June 2022 4. Prepare the consolidated financial statements at 30 June 2022 5. Write a report to explain the consolidation process as per AASB10 for wholly owned entities.