Moora Ltd acquired all the issued shares (ex div.) of Banya Ltd on 1 July 2023 for $110 000. At this date Banya Ltd recorded a dividend payable of $10 000 and equity of the following.

 

All the identifiable assets and liabilities of Banya Ltd were recorded at amounts equal to their fair values at acquisition date except for the following.

 

Of the inventories, 90% was sold by 30 June 2024. The remainder was sold by 30 June 2025. The machinery was considered to have a further 5-year life and it is depreciated on a straight-line basis. 

 

Both Banya Ltd and Moora Ltd use the revaluation model for land. At 1 July 2023, the balance of Moora Ltd's asset revaluation surplus was $13 500.

 

In May 2024, Banya Ltd transferred $3000 from the retained earnings at 1 July 2023 to a general reserve.

 

The tax rate is 30%.

 

The following information was provided by the two companies at 30 June 2024.

	Moora Ltd		Banya Ltd
Profit before tax		120  000				12  500
Income tax expense		(56  000	)			(4  200	)
Profit for the year		64  000				8  300
Retained earnings (1/7/23)		80  000				36  000
		144  000				44  300
Transfer to general reserve		(-	)			(3  000	)
Retained earnings (30/6/24)	$	144  000			$	41  300
Share capital		360  000				54  000
Retained earnings		144  000				41  300
General reserve		10  000				3  000
Asset revaluation surplus		18  500				20  000
Liabilities		42  500				13  000
	$	575  000			$	131  300
Land	$	160  000			$	20  000
Plant and machinery		360  000				125  600
Accumulated depreciation — plant and machinery		(110  000	)			(33  000	)
Inventories		55  000				18  700
Shares in Banya Ltd		110  000				-
	$	575  000			$	131  300

 

 

Required

1. Prepare the acquisition analysis at 1 July 2023.                                        

2. Prepare the consolidation worksheet entries for Moora Ltd's group at 30 June 2024.  

3. Prepare the consolidated financial statements for Moora Ltd's group at 30 June 2024.  

Share capital $54 000 Retained earnings 36 000 Asset revaluation surplus 18 000