On 1 July 2015, Koala Ltd acquired all of the shares of Panda Ltd, on a cum-div. basis, for $2,700,000. At this date, the equity and liability sections of Panda Ltd's statement of financial position showed the following balances:

Share capital - 400000 shares

General reserve

Retained earnings

Revaluation surplus

Dividend payable

$

1,200,000

350,000

960,00

60,000

25,000

At 1 July 2015, Panda Ltd's assets included $46 000 of recorded goodwill. The dividend payable at acquisition date was subsequently paid in August 2015.

At acquisition date, all the identifiable assets and liabilities of Panda Ltd were recorded at amounts equal to fair value except for the following:

Carrying amount

Fair value

Land

$500000

$550 000

Inventory

45000

55000

Plant (cost $300000)

240 000

280 000

The inventory on hand in Panda Ltd at 1 July 2015 was sold in November 2015. The plant was estimated to have a further 5-year life with zero residual value. The land on hand at acquisition date was sold to Mittens Ltd in March 2017.

On 30 June 2016, goodwill was impaired by $8 500. The tax rate is 30%.

During the period 1 July 2015 to 30 June 2017, the following intragroup transactions have occurred between Koala Ltd and Panda Ltd:

(T1) At 30 June 2016, Koala Ltd approved and declared a final dividend of $20,000, and Panda Ltd declared and approved a final dividend of $16,000. This dividend was paid on 1 November 2016.

(T2) At 30 June 2017, Koala Ltd approved and declared a final dividend of $14,000, and Panda Ltd declared and approved a final dividend of $16,000.

(T3) On 1 January 2016, Koala Ltd provided a $1,000,000 loan to Panda Ltd. The interest rate on this loan is 8%, and interest is paid each year on 30 June. At 30 June 2017, no principal repayments have been made on the loan.

(T4) Koala Ltd issued 4 000 10% debentures of $100 at nominal value on 1 April 2017. Panda Ltd acquired 500 of these debentures. Interest is payable on 1 July each year.

(T5) In April 2016, Koala Ltd sold inventory to Panda Ltd for $24,000. The inventory had previously cost Koala Ltd $20,000. By 30 June 2016, half of this inventory had been sold to Boz Ltd for $25,000. The remainder of the inventory was sold to Coo Ltd in September 2016 for $9 000.

(T6) On 3 June 2017, Panda Ltd sold inventory to Koala Ltd for $4,000. The transfer price included a mark-up of 20% on cost. At 30 June 2017, one-quarter of this inventory was still on hand.

(T7) In November 2015, Panda Ltd sold inventory to Koala Ltd at a transfer price of $48,000. The inventory had previously cost Panda Ltd $35,000. All of this inventory was subsequently sold to Green Ltd in July 2016 for $56,000.

(T8) On 1 January 2016, Koala Ltd sold machinery to Panda Ltd for $140,000. The machinery had a written down value at the time of sale of $100,000. For this type of machinery, both entities charge depreciation at a rate of 10% p.a. straight-line.

(T9) On 1 March 2017, Panda Ltd sold equipment to Koala Ltd for $60 000, this asset having a carrying amount at the time of sale of $50,000. Panda Ltd had treated the asset as a depreciable non-current asset, being depreciated at 10% on cost, whereas Koala Ltd records the equipment as inventory. Koala Ltd sold this asset to Hochi Ltd on 15 April 2017 for $63,000.

(T10) On 1 January 2017, Panda Ltd acquired furniture for $45,000 from Koala Ltd. The furniture had originally cost Koala Ltd $62,000 and had a carrying amount at the time of sale of $48,000. The sale was made on credit and, at 30 June 2017, $4,500 was still outstanding. Both entities apply depreciation at a rate of 10% p.a. straight line.

Required

a) Prepare the acquisition analysis and consolidation worksheet entries at 1 July 2015.

b) Prepare the consolidation worksheet entries at 30 June 2016.

c) Prepare the consolidation worksheet entries at 30 June 2017.

NOTE: Ensure all intragroup transaction adjustments are correctly labelled as T1 - T10. Failure to do so will result in a mark deduction.

Narrations must be provided. Show all workings.