Question
On 1 July 2017, Ukulele Ltd acquired 40% of the shares of Bongo Ltd for $99,500. At this date, all the identifiable assets and liabilities
On 1 July 2017, Ukulele Ltd acquired 40% of the shares of Bongo Ltd for $99,500. At this date, all the identifiable assets and liabilities of Bongo Ltd were recorded at amounts equal to fair value except for inventory which had a fair value $9,900 greater than the carrying amount. All inventory was sold by 30 June 2018. The tax rate is 30%. Bongo Ltd was classified as an associate of Ukulele Ltd.
The profits and losses recorded by Bongo Ltd from the next 6 years were as follows:
| 201718 | $29,900 |
| 201819 | 5,000 |
| 201920 | (249,900) |
| 202021 | (50,000) |
| 202122 | 15,000 |
| 202223 | 19,900 |
Required Prepare the journal entries for the consolidation worksheet of Ukulele Ltd for the equity accounting of Bongo Ltd in each of the years from 201723.
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