On 1 July 2012, A Ltd acquired 80% of the issued shares in B Ltd for a cash payment of $12,000,000. At the date of acquisition, the shareholders' equity of Blue Sky Ltd comprised the following:

Share Capital $6,000,000

General Reserve $3,000,000

Retained profit $3,000,000

$12,000,000

At the date of acquisition a depreciate non-current asset of B Ltd were valued at $800,000 below their fair values. The directors of A Ltd decided not to advise the directors of B Ltd to revalue the relevant assets. Furthermore, no adjustments have been made with respect to these non-current assets in the accounts of B Ltd since the date of acquisition. This depreciate asset had a useful life of ten (10) years at the date of acquisition. Goodwill on acquisition was impaired by $550,000 in the financial year ended 30 June 2013 and $600,000 in the financial year ended 30 June 2017. The information extracted from statement of comprehensive income, statement of financial position and statement of changes in equity of A Ltd and B Ltd for the year ended 30 June 2017 is shown as below:

A ($,000) B Ltd ($,000)

Sales 125,000 75,000

Cost of goods sold (80,000) (69,000)

Gross profits 45,000 6,000

Other income 5,000 3,000

Operating expenses (4,000) (2,600)

Operating profit before income tax expense 46,000 6,400

Income tax expense (13,800) (1,920)

Operating profit after income tax expense 32,200 4,480

Retained profit (1/7/16) 12,000 6,200

Interim dividend paid (1/1/17) (8,200) (800)

Proposed Final dividend (4,800) (1,200)

Retained profit (30/6/17) 31,200 8,680

A Ltd $,000 B Ltd$,000

Current assets 18,274 4,678

Non-current assets 55,443 16,449

Investments 16,353 5,113

90,070 26,240

Share capital 35,000 6,000

General reserve 7,500 3,200

Revaluation Surplus 870 560

Retained profit 31,200 8,680

Liabilities 15,500 7,800

90,070 26,240

Additional Information:

• All dividends have been paid from post-acquisition profits. Both A Ltd and B Ltd record dividends as income when the dividends are proposed.
• The opening stock of A Ltd for the year ended 30 June 2017 includes goods bought from B Ltd at a profit of $734,000.
• Transactions between the two companies during the year ended 30 June 2017 amounted to $25,000,000 worth of sales. At 30 June 2017, B Ltd still held some of inventory purchased from A Ltd during the year. The inventory had been transferred at a profit of $680,500.
• On 1 July 2014, B Ltd sold a piece of machinery to A Ltd for $1,950,000. The machinery had original cost $1,500,000 on 1 July 2012, and was depreciated in B Ltd's books of account at 10% per year , straight line. The directors of A Ltd considered the remaining estimated useful life of the machinery was eight (8) years.
• During the year, B Ltd paid an interest on the loan from A Ltd $187,500. At 30 June 2017, the outstanding balance of the loan that B Ltd borrowed from A Ltd amounted 2,500,000.
• Management of A Ltd measures any non-controlling interest at fair value.
• Income tax rate is 30%.

Required

• prepare necessary consolidated journal entries to eliminate the investment and company transactions for the year ended 30 June 2017 (including all tax effects on the internal transactions).
• Design a consolidation worksheet and then post all consolidation journal entries into the worksheet.
• Prepare consolidated Financial Statements according to Australian Accounting Standard board 10ConsolidatedFinancial Statementsbased on the consolidated worksheet.