On 1 July 2012, Green Bay Ltd acquired 80% of the issued shares in Blue Sky Ltd for a cash payment of $12,000,000. At the date of acquisition, the shareholders equity of Blue Sky Ltd comprised the following:
Urn l July EDIE, Green Bay Ltd acquired sets of the issued shares in Blue Elev Ltd fer a cash payment of Ill. At. the date of aequjsitien, the sharehalders' eqttv af Blue 51c}.r Ltd eemprised the fellawing: Share Capital General Reserve Retained prot At the date ef' aequisitien a depreciahle nee-current asset ef' Blue Sky Ltd were valued at SEWJHI' helew their fair values. The directors ef' Green Eazll-r Ltd deeided net te advise the direett'ns ef Blue Sky Ltd In revalue the relevant assets. Furthermere. ne adjusenents have been made with respect te these nan-current assets in the aeerntnts e-f Blue Sky Ltd sirtee the date nf aequisitinn. This depreciahle asset had a useful life of ten [Iii] years at the date of acquisition. Geedurill an acquisition was impaired by $513,000 in the nancial year ended 31] June El and Ed in the nancial year ended 3'!) June Bill\". The infertnatien extracted Erem statement ef eentprehensive incense, statement of nancial pnsititnt and statement of changes in equity of Green Ea}.r Ltd and Blue Sky Ltd fer the vent ended it] June ll? is shewn as below: Green Bay Blue Sky Ltd resets Ltd (5,000] \"m _m \f- All dividends hare been paid Front post-acquisition prots. Both Green Bay Ltd and Blue Sky Ltd record dividends as income 1when the dividends are proposed a The opening stock ofGroen Bay Ltd for the year ended 3D June 201'! includes goods bought from Blue Sky Ltd at a prot of $341110. - Transactions between the two companies during the year ended it) June 2i] i 'i' amounted to SISJi worth of sales. fit it] June 101?, Blue Sky Ltd still held some of inventory purchased from Green Bay Ltd during the year. The inventory had been transferred at a prot of S. - Ga 1 .iuly Ild. Blue Sky Ltd said a piece of machinery to Green Bay Ltd for 5 | sine-on The machinery had original cost s1.sm.ooo on | July hill. and was depreciated in Blue Sky Ltd's books ol'aecount at \"it": per annum. straight line. The directors oi'Green Bay Ltd considered the remaining estimated usefbl life of the machinery was eight (8} years. - During the year. Blue Sky Ltd paid an interest on the loan from Green Bay Ltd 513?,S. At 30 June 2D] T, the outstanding balance of the loan that Blue Sky Ltd borrowed lion: Green Bay Ltd amounted 2,50. - Management of Green Bay Ltd measures any non-controlling interest at fair value. I income tax rate is 3W. Required 1) Prepare all necessary consolidated joamal entries to eliminate the investment and intra- eompany transactions for the year ended 3111 June Ell]? [including all tax effects on the internal transactions]. 2] Design a oonsolidation worksheet and then post all consolidation journal entries into the worksheet. 3) Prepare consolidated Financial Statements according to MSB ltlI Consoitdared F inanetai Statements based on the consolidated worksheet
