On 1 April 2014, T Ltd acquired 70% the issued capital of C Ltd and has control of C Ltd.

C Ltds Balance Sheet as at 31 March 2014 was as follows:

Issued and Paid in Capital 400,000 Property, Plant & Equip 485,000

Retained Earnings 85,000 Less Accum. Depn (100,000) 385,000

Liabilities 120,000 Bank 30,000

A/c Receivable 100,000

Inventory 90,000

$605,000 $605,000

On 1 April 2014 it is determined that the fair value of property, plant and equipment of C Ltd is $440,000 and C Ltd revalues its property, plant and equipment to fair value at this date.

On 1 April 2015, C Ltd sold forklift equipment (as part of its trading operations) to Br Ltd for $120,000, these goods having been marked up 20% on cost. t Ltd has since depreciated this equipment at 10% on its cost price from C Ltd

. At 31 March 2016, C Ltd held stock purchased from T Ltd at $42,000, which represented a mark-up of 20% on cost. All of these goods were sold during the subsequent year. During the year to 31 March 2017, T Ltd sold further goods to C Ltd for $145,000, which included a mark-up on cost of 25%, and of which $65 000 remained unsold at 31 March 2017.

At 31 March 2017 goodwill on acquisition is considered to be impaired by $18,000. Goodwill on acquisition had not previously been considered impaired. The non-controlling interest is measured as a proportionate share of C identifiable net assets.

The attached Consolidation Worksheet for the year held 31 March 2017 has been completed with relevant financial statement data for both companies. T Ltd has only the one subsidiary company.

REQUIRED: (a) Prepare notional journal entries for consolidation purposes (it is advisable to show workings where appropriate). (b) Enter the notional journal entries on the attached worksheet, and complete and balance the final columns to provide figures for consolidated financial statements.

consolidation Worksheet for the year ended 31 march 2017

Financial statements

Revenue Statetement T ltd C ltd

Sales	3510000	565000
less cost of sales	(2370000)	(310000)
gross profit	1140000	255000
pluss other income
dividends	85000	-
Mangment fee-C Litd	50000
	1275000	255000
less expenses	(1020000)	(195000)
Net profit before tax	255000	60000
less tax provided	(85000)	(20000)
Net profit after tax	170000	40000
non controling interest share of profit plus retained earnings b/fward	315000	130000
	485000	170000
less interim dividend paid	(75000)	(25000)
propossed final dividend	(90000)	(30000)
	(165000)	(55000)
retainend earnings c/fwd	320000	115000
BALANCE SHEET	T ltd	C ltd
Paid-in capital	2350000	400000
retained earnings	320000	115000
asset revaluation reserve	215000	55000
non-controlling interest
Current account C ltd	65000
final dividend payable	90000	30000
other liabilities	1290000	140000
	4330000	740000
property plant & Equipment	3075000	510000
less accum depreciation	(910000)	85000
	2165000	425000
Investment in C ltd	600000	-
other investment	380000	-
current account- T ltd	-	65000
bank	65000	25000
accounts receivable	420000	95000
inventory	670000	130000
dividend receivable-C ltd	30000	-
	1740000	1740000