On 1 July 2013 Donald Ltd acquired all of the share capital (cum div) of Duck Limited for a consideration of $600,000 cash and a brand that was held in their accounts at a fair value of $50,000. Duck Ltd reported a dividend payable of $8,000 at 1 July 2013.

At that date all the identifiable assets and liabilities were recorded at fair value with the exception of:

The inventory was all sold by 30/6/14. The remaining useful life of the plant is 5 years. The accounts receivable were collected by 30/6/14 for $18,000. The land was sold on 30/12/16 for $90,000. The plant was on hand still at 30/6/17.

At the date of acquisition the equity of Duck Ltd consisted of:

Share capital 420000

General reserve 90000

Retained earnings 70000

Additional Information

1. On 1 Jan 2017 Duck Ltd sold inventory to Donald Ltd costing $60,000 for $75,000. Half of this inventory was sold to outside parties for $30,000 by 30/6/17 2. On 1 Jan 2016 Duck Ltd sold inventory costing $9000 to Donald Ltd for $16,000. Donald Ltd treats the item as equipment and depreciates it at 10% per annum.

3. On 1 July 2016 Duck sold plant to Donald for $21,000. The plant had cost Duck $24,000 on 1 July 2014 and it was being depreciated at 10% per annum. Donald regards the plant as inventory. The inventory was all sold by 30th July 2016. 4. At 1 July 2016 Duck Ltd held inventory that it had purchased from Donald Ltd on 1 June 2016 at a profit of $9000. All inventory was sold by 30 June 2017.

5. Donald Ltd accrues dividends from Duck Ltd once they are declared. 6. Donald Ltd has earned $1200 in interest revenue in the 2017 financial year from Duck Ltd.

7. Donald Ltd has earned $3800 in service revenue in the 2017 financial year from Duck Ltd.

8. Assume a tax rate of 30%.

Required

A. Prepare the acquisition analysis at 1 July 2013. B. Prepare the BCVR and pre-acquisition journal entries at 1 July 2013. C. Prepare the BCVR and pre-acquisition journal entries at 30 June 2017. D. Prepare the consolidation worksheet journal entries to eliminate the effects of Inter-entity transactions as at 30 June 2017.

this is my working

Could you check it for me and help me with C & D, please?

ASSET Inventory Land Plant (less depn) Market Value 14,000 85,000 Book Value 10,000 80,000 16,000 (2000) 14,000 20,000 19,000 18,000 Acounts Receivable G A) Acquisition Analysis Fair Value of Identifiable Assets and Liabilities Equity Share Capital General Reserve Retained Eamings $ $ $ 420,000.00 90,000.00 70,000.00 $ 580,000.00 Revaluations Inventories Land Plant (Accounts Receivable) $ $ $ $ 2,800.00 3,500.00 3,500.00 (1,400.00) Net Fair Value $ 8,400.00 $ 588,400.00 Consideration Transferred Share Capital (Dividend Paid) $ $ 600,000.00 (8,000.00) 50,000.00 Brand $ $ 642,000.00 Goodwill Consideration Transferred (Net Fair Value) $ $ 642,000.00 (588,400.00) $ 53,600.00 H B) BCVR Journal Entries as at 1 July 2013 1 Inventory Deferred Tax Liability (DTL) Dr $ 4,000.00 BCVR Cr Cr $ $ 1,200.00 2,800.00 Dr 2 Land Deferred Tax Liability (DTL) BCVR $ 5,000.00 Cr Cr $ $ 1,500.00 3,500.00 3 Accumulated Depreciation Plant Dr $ 2,000.00 Cr $ 2,000.00 Dr 4 Plant Deferred Tax Liability (DTL) BCVR $ 5,000.00 Cr 1,500.00 Cr $ $ 3,500.00 Dr 5 Deferred Tax Asset (DTA) BCVR Accounts Receivable $ $ Dr 600.00 1,400.00 cr $ 2,000.00 6 Goodwill BCVR Dr $ 53,600.00 Cr $ 53,600.00 Pre-Acquisiton Entries as at 1 July 2013 Retained Earnings Dr $ 70,000.00 Share Capital Dr $ 420,000.00 General Reserve Dr $ 90,000.00 BCVR Dr $ 62,000.00 Shares in Duck Limited Cr $ 642,000.00 Dr Dividend Payable Dividend Receivable $ 8,000.00 Cr $ 8,000.00 C) BCVR Journal Entries as at 30 June 2017 Dr $ 4,000.00 1 Retained Earnings Deferred Tax Lability (DTL) Transfer from BCVR Cr $ $ 1,200.00 2,800.00 2 Accumulated Depreciation Plant Dr $ 2,000.00 Cr $ 2,000.00 Dr $ 5,000.00 Plant Deferred Tax Liability (DTL) BCVR Cr $ $ 1,500.00 3,500.00 Cr Dr Depreciation Expense Retained Earnings Accumulated Depreciation $ $ 1,200.00 2,000.00 Dr Cr 3200 Dr $ 960.00 Deferred Tax liability (DTL) Interest Tax Expense (ITE) Retained Earnings Cr Cr $ $ 360.00 600.00 Dr $ 5,000.00 3 Gain on Sale Interest Tax Expense (ITE) BCVR go $ $ 1,500.00 3,500.00 Dr $ 3,500.00 BCVR Transfer from BCVR Cr $ 3,500.00 4 Deferred Tax Asset (OTA) BCVR Accounts Receivable Dr Dr $ $ 600.00 1,400.00 $ 2,000.00 Dr $ 3,600.00 5 Goodwili BCVR Cr $ 3,600.00 Pre-Acquisition Journal Entries as at 30 June 2017 Retained Earnings Dr $ 70,000.00 Share Capital Dr $ 380,000.00 General Reserve Dr $ 90,000.00 BCVR Dr $ 62,000.00 Shares in Duck Umited $ 642,000.00 ASSET Inventory Land Plant (less depn) Market Value 14,000 85,000 Book Value 10,000 80,000 16,000 (2000) 14,000 20,000 19,000 18,000 Acounts Receivable G A) Acquisition Analysis Fair Value of Identifiable Assets and Liabilities Equity Share Capital General Reserve Retained Eamings $ $ $ 420,000.00 90,000.00 70,000.00 $ 580,000.00 Revaluations Inventories Land Plant (Accounts Receivable) $ $ $ $ 2,800.00 3,500.00 3,500.00 (1,400.00) Net Fair Value $ 8,400.00 $ 588,400.00 Consideration Transferred Share Capital (Dividend Paid) $ $ 600,000.00 (8,000.00) 50,000.00 Brand $ $ 642,000.00 Goodwill Consideration Transferred (Net Fair Value) $ $ 642,000.00 (588,400.00) $ 53,600.00 H B) BCVR Journal Entries as at 1 July 2013 1 Inventory Deferred Tax Liability (DTL) Dr $ 4,000.00 BCVR Cr Cr $ $ 1,200.00 2,800.00 Dr 2 Land Deferred Tax Liability (DTL) BCVR $ 5,000.00 Cr Cr $ $ 1,500.00 3,500.00 3 Accumulated Depreciation Plant Dr $ 2,000.00 Cr $ 2,000.00 Dr 4 Plant Deferred Tax Liability (DTL) BCVR $ 5,000.00 Cr 1,500.00 Cr $ $ 3,500.00 Dr 5 Deferred Tax Asset (DTA) BCVR Accounts Receivable $ $ Dr 600.00 1,400.00 cr $ 2,000.00 6 Goodwill BCVR Dr $ 53,600.00 Cr $ 53,600.00 Pre-Acquisiton Entries as at 1 July 2013 Retained Earnings Dr $ 70,000.00 Share Capital Dr $ 420,000.00 General Reserve Dr $ 90,000.00 BCVR Dr $ 62,000.00 Shares in Duck Limited Cr $ 642,000.00 Dr Dividend Payable Dividend Receivable $ 8,000.00 Cr $ 8,000.00 C) BCVR Journal Entries as at 30 June 2017 Dr $ 4,000.00 1 Retained Earnings Deferred Tax Lability (DTL) Transfer from BCVR Cr $ $ 1,200.00 2,800.00 2 Accumulated Depreciation Plant Dr $ 2,000.00 Cr $ 2,000.00 Dr $ 5,000.00 Plant Deferred Tax Liability (DTL) BCVR Cr $ $ 1,500.00 3,500.00 Cr Dr Depreciation Expense Retained Earnings Accumulated Depreciation $ $ 1,200.00 2,000.00 Dr Cr 3200 Dr $ 960.00 Deferred Tax liability (DTL) Interest Tax Expense (ITE) Retained Earnings Cr Cr $ $ 360.00 600.00 Dr $ 5,000.00 3 Gain on Sale Interest Tax Expense (ITE) BCVR go $ $ 1,500.00 3,500.00 Dr $ 3,500.00 BCVR Transfer from BCVR Cr $ 3,500.00 4 Deferred Tax Asset (OTA) BCVR Accounts Receivable Dr Dr $ $ 600.00 1,400.00 $ 2,000.00 Dr $ 3,600.00 5 Goodwili BCVR Cr $ 3,600.00 Pre-Acquisition Journal Entries as at 30 June 2017 Retained Earnings Dr $ 70,000.00 Share Capital Dr $ 380,000.00 General Reserve Dr $ 90,000.00 BCVR Dr $ 62,000.00 Shares in Duck Umited $ 642,000.00