Mike Ltd had acquired its 100% interest in Ross Ltd on 1 July 2018 that is four years earlier

for $1,094,600. At that date the owners equity of Ross Ltd was as follows:

Share capital 500,000

Retained earnings 425,000

At the date of acquisition all the assets of Ross Ltd were considered to be fairly valued exceptfor the following:

Carrying amount Fair value

Plant (Cost $50,000) 40,000 70,000

Brand Name Not recognised 110,000

The plant has a remaining useful life of 5 years. The brand name was internally developed by Ross Ltd and is considered to have an indefinite life. All fair value adjustments are recorded on consolidation.

Other information

• The opening inventory of Mike Ltd as at 1 July 2021 included inventory purchased from Ross Ltd for $105,000. The original cost of the inventory was $87,500. All theinventory was sold outside the group during the 2022 financial year.
• During the year ended 30 June 2022 Mike Ltd sold inventory to Ross Ltd for

$162,500. The original cost of the inventory was $100,000. Ross Ltd had sold 60% ofthe inventory outside the group by 30 June 2022.

• On 1July 2020, Ross Ltd sold plant to Mike Ltd for $120,000. The plant originally cost $100,000 and had a carrying amount at the date of sale of $80,000. At the date ofsale the plant had a remaining useful life of ten years.
• Mike Ltd charges Ross Ltd a management fee of $66,250 each year.
• As at 30 June 2022 Ross Ltd owes Mike Ltd $100,000 for an interest free loan.
• Management of Mike Ltd believes goodwill was impaired by $5,000 in the currentfinancial year. Impairments of goodwill recorded in prior years total $6,500.
• During the year ended 30 June 2022, Ross Ltd declared and paid dividend of

$232,500. The applicable tax rate is 30%.

Required

1. Prepare all necessary consolidation adjustment entries needed to prepare theconsolidated financial statements as at 30 June 2022.
2. If Mikes acquisition was not 100%, describe how NCI are affected by intra-grouptransactions
3. What are reporting/disclosures would Mike need to do to account for the non-controlling interest?