On 1 July 2016 Alaska Ltd acquired 100% of the share capital (ex div.) of Salmon Ltd for $556,000. At that date, the relevant balances in the records of Salmon Ltd were:

	$
Share capital	384,000
General reserve	24,000
Retained earnings	96,000
Dividend payable	12,000

At the date of acquisition all assets and liabilities of Salmon Ltd were recorded in the accounting records at amounts equal to their fair values with the exception of the following assets:

Carrying amount Fair value

$ $

Inventory 12,000 16,800

Equipment 56,400 74,400

All inventory on hand at acquisition date was sold by 30 June 2017. The cost of the equipment was $90,000 and had a further five (5) year life as at the date of acquisition. Salmon Ltd disclosed a contingent liability at the date of acquisition in relation to a claim by an employee for a salary dispute. Alaska Ltd estimated a fair value of $19,200 on the claim. This claim was settled in December 2019 for $10,800.

Additional information:

1. During the 2019-20 financial year, Alaska Ltd sold inventory to Salmon Ltd for $33,600 at a mark-up of 40%. By 30 June 2020, Salmon Ltd still held inventory that it had bought from Alaska Ltd for $10,080.

2. During the financial year ending 30 June 2019, Alaska Ltd purchased inventory from Salmon Ltd for $21,600. The cost of inventory to Salmon Ltd was $15,600. Half of this inventory was sold by Alaska Ltd to external parties by 30 June 2019. The balance was sold to external parties in Dec 2019.

3. On 1 January 2018, Salmon Ltd sold an item of equipment to Alaska Ltd for $48,000. The original cost of the equipment to Salmon Ltd was $62,400 and had a carrying amount at the time of sale of $38,400. The equipment is considered to have a further five (5) year life as at 1 January 2018.

4. On 1 January 2020, Alaska Ltd acquired $60,000 of debentures previously issued by Salmon Ltd. The debentures were acquired on the open market for $51,600. Interest on debentures is paid half-yearly. Outstanding interest has been paid by Salmon Ltd on 30 June 2020.

5. All transfers from retained earnings to the general reserve by Salmon Ltd were from post-acquisition earnings.

6. On realisation of the business combination valuation reserve, a transfer is made to retained earnings on consolidation.

7. The tax rate is 30%.

The financial statements of the two companies at 30 June 2020 are as follows:

	Alaska $	Salmon $
Revenues	1,020,000	660,000
Expenses	(792,000)	(504,000)
Net profit before tax	228,000	156,000
Income tax expense	(78,000)	(57,600)
Net profit after tax	150,000	98,400
Retained earnings 1 July 2019	192,000	144,000
	342,000	242,400
Dividend declared	(50,400)	(21,600)
Transfer to general reserve	(19,200)	(14,400)
Retained earnings 30 June 2020	272,400	206,400
Share capital	600,000	384,000
General reserve	98,400	64,800
Accounts payable	54,000	24,000
6% debentures		108,000
Other liabilities	115,200	7,200
TOTAL EQUITY AND LIABILITIES	1,140,000	794,400
	0	0
Cash	204,000	180,000
Accounts receivable	30,000	78,000
Prepayment	36,000	72,000
Inventory	78,000	108,000
Debentures in Salmon Ltd	51,600
Investment in Salmon Ltd	556,000
Non-current assets	184,400	356,400
TOTAL ASSETS	1,140,000	794,400

Required:

Prepare the consolidation journal entries for the Alaska Ltd group for the year ended 30 June 2020.

acquisition analysis

BCVR journal entries

pre-acquisition journal entries

intra group journal entries