On 1 July 2010 Anderson Ltd acquires 70 percent of the equity capital of Arthur Ltd at a cost of $4 million. At the date of acquisition all assets of Arthur are fairly stated and the total shareholder funds of Arthur Ltd are $4.4 million consisting of: $ Share Capital 3 000 000 Retained Earnings 1 400 000 4 400 000 As at 30 June 2012 (two years after the date of acquisition) the financial statements of the two companies are as follows: Anderson Ltd Arthur Ltd ($ 000) ($ 000) Detailed reconciliation of opening and closing retained earnings Sales Revenue 800 200 Cost of Goods Sold (200) (80) Other Expenses (120) (60) Other Revenue 310 85 Profit 790 145 Tax 170 35 Profit After Tax 620 110 Retained Earnings - 30 June 2011 2 000 1 600 2 620 1 710 Dividends Paid (400) (80) Retained Earnings - 30 June 2012 2 220 1 630 Statement of Financial Position Shareholders Equity Retained Earnings 2 220 1 630 Charles Sturt University Subject Outline ACC322 201130 W I-12 February 2011-Version 1 Page 15 of 19 Share Capital 8 000 3 000 Current Liabilities Accounts Payable 120 80 Non-current Liabilities Loans 1 200 500 11 540 5 210 Current Assets Cash 300 50 Accounts Receivable 500 350 Inventory 1 000 600 Non-current Assets Land 2 800 2 210 Plant 2 940 2 000 Investment in Arthur Ltd 4 000 - 11 540 5 210 Additional Information The Management of Anderson Ltd measures any non-controlling interest in Arthur Ltd at fair value. During the 2012 financial year Arthur Ltd sells $45 000 of inventory to Anderson Ltd. At year end Anderson has sold this inventory. The tax rate is 30 percent. Required Showing all workings, including a consolidation worksheet and journal entries, prepare the consolidated statement of financial position, consolidated statement of comprehensive income and consolidated statement of changes in equity for Anderson Ltd and its controlled entity