On 1 January 202, Perry Ltd gained control of Santos Ltd by acquiring 80% of its shares for $332000. At this date, Santos had share capital of $300000 and retained profits of $15000. All assets and liabilities of Santos were recorded at their fair values. Below is an extract of financial information of both entities as at 31 December 203, the end of the current financial year (FY20X3): Additional information: - The partial goodwill method is used. Impairment of consolidation goodwill was assessed to be $10000 in FY 203. - During FY20X3, Perry sold inventories to Santos for $100000. The inventories originally cost Perry $64000. 90% of the inventories were sold by Santos to external parties as at 31 December 203. - Santos sold a vehicle to Perry on 1 January 202 for $159000. The vehicle originally cost Santos $190000 and had a zero residual value. Santos depreciated the vehicle at the rate of 20% p.a. using the straight-line method. The vehicle was 2 years old at the time of the intragroup sale. The vehicle's residual value and useful life were not affected by the sale. Perry depreciates the vehicle also using the straight-line method. Required: a) Prepare all the necessary consolidation journal entries at 31 December 203. Note 1) Use the provided journal entry template to enter your answer. 2) Workings/calculations or narrations are NOT required. 3) The template should provide enough space. However, if you find the space is insufficient in the template or encounter a table formatting issue, write your journal entries below the template and ensure labelling DR or CR. b) Which entity made the gain in the intragroup inventory sales transaction? Do you need to deduct the gain from Santos' equity before calculating the NCI share of its equity? c) Which entity made the gain in the intragroup vehicle sales transaction? Do you need to deduct the gain from Santos' equity before calculating the NCI share of its equity? d) Calculate the NCl allocation for the following equity items of Santos for the year ended 31 December 20X3. Show workings. On 1 January 202, Perry Ltd gained control of Santos Ltd by acquiring 80% of its shares for $332000. At this date, Santos had share capital of $300000 and retained profits of $15000. All assets and liabilities of Santos were recorded at their fair values. Below is an extract of financial information of both entities as at 31 December 203, the end of the current financial year (FY20X3): Additional information: - The partial goodwill method is used. Impairment of consolidation goodwill was assessed to be $10000 in FY 203. - During FY20X3, Perry sold inventories to Santos for $100000. The inventories originally cost Perry $64000. 90% of the inventories were sold by Santos to external parties as at 31 December 203. - Santos sold a vehicle to Perry on 1 January 202 for $159000. The vehicle originally cost Santos $190000 and had a zero residual value. Santos depreciated the vehicle at the rate of 20% p.a. using the straight-line method. The vehicle was 2 years old at the time of the intragroup sale. The vehicle's residual value and useful life were not affected by the sale. Perry depreciates the vehicle also using the straight-line method. Required: a) Prepare all the necessary consolidation journal entries at 31 December 203. Note 1) Use the provided journal entry template to enter your answer. 2) Workings/calculations or narrations are NOT required. 3) The template should provide enough space. However, if you find the space is insufficient in the template or encounter a table formatting issue, write your journal entries below the template and ensure labelling DR or CR. b) Which entity made the gain in the intragroup inventory sales transaction? Do you need to deduct the gain from Santos' equity before calculating the NCI share of its equity? c) Which entity made the gain in the intragroup vehicle sales transaction? Do you need to deduct the gain from Santos' equity before calculating the NCI share of its equity? d) Calculate the NCl allocation for the following equity items of Santos for the year ended 31 December 20X3. Show workings
