On 1 July 2015, Fluffy Ltd acquired all the issued shares of Glider Ltd. Fluffy Ltd paid $30 000 in cash and 20 000 shares in Fluffy Ltd valued at $3 per share. At this date, the equity of Glider Ltd consisted of $66 000 share capital and $6000 retained earnings.

At 1 July 2015, all the identifiable assets and liabilities of Glider Ltd were recorded at amounts equal to their fair values except for-

CARRYING AMT FAIR VALUE

PLANT COST($150000) $120000 $123000

PATENTS $105000 $90000

INVENTORY $18000 $22500

The plant was considered to have a further 5-year life. The patents were sold for $120 000 to an external entity on 18 August 2015. The inventory was all sold by 30 June 2016.

Additional information

(a) Fluffy Ltd sells certain raw materials to Glider Ltd to be used in its manufacturing process. At 1 July 2016, Glider Ltd held inventory sold to it by Fluffy Ltd in the previous year at a profit of $600. During the 2016-17year, Fluffy Ltd sold inventory to Glider Ltd for $21 000. None of this was on hand at 30 June 2017.

(b) Glider Ltd also sells items of inventory to Fluffy Ltd. During the 2016-17year, Glider Ltd sold goods to Fluffy Ltd for $4500. At 30 June 2017, inventory which had been sold to Fluffy Ltd at a profit of $300 was still on hand in Fluffy Ltd's inventory.

(c) On 1 July 2016, Glider Ltd sold an item of plant to Fluffy Ltd for $15 000. This plant had a carrying amount in the records of Glider Ltd of $14 000 at time of sale. This type of plant is depreciated at 10% p.a. on cost.

(d) O 1 January 2015, Fluffy Ltd sold an item of inventory to Glider Ltd for $18 000. The inventory had cost Fluffy Ltd $16 000. This item was classified by Glider Ltd as plant. Plant of this type is depreciated by Glider Ltd at 20% p.a.

(e) On 1 March 2017, Glider Ltd sold an item of plant to Fluffy Ltd. Whereas Glider Ltd classified this as plant, Fluffy Ltd classified it as inventory. The sales price was $9000 which included a profit to Glider Ltd of $1500. Fluffy Ltd sold this to another entity on 31 March for $9900.

(F) The tax rate is 30%.

At 30 June 2017, the following financial information was provided by the two companies:

Required

Prepare consolidation worksheet for the preparation of the consolidated financial statements of Fluffy Ltd at 30 June 2017.

Glider Ltd Fluffy Ltd Dr Cr Dr CR Sales revenue 64500 78000 Cost of sales 30900 46350 4800 9000 Trading expenses Office expenses 7950 4050 1800 3900 9000 15000 7500 14000 11100 7300 96000 66000 48000 31500 Depreciation expenses Proceeds on sale of plant Carrying amount of plant sold Income tax expense Share capital Retained earnings Current liabilities Deferred tax liability Plant Accumulated depreciation - plant Intangibles Deferred tax assets Shares in Glider Ltd 21100 10500 11000 15000 57000 107250 18300 33450 12000 11100 8100 9450 90000 0 28500 24600 Inventory Receivables 8250 12450 267900 267900 249450 249450