On 1 July 2018, A Ltd acquired all of the issued shares (cum div.) of B Ltd for $200,000. At this date, the equity of B Ltd consisted of: Share capital $120,000; General reserve $24,000; Retained earnings $16,000. At 1 July 2018, one of the liabilities of B Ltd was a dividend payable of $10,000. This was paid on 1 September 2018. One of the assets recorded by B Ltd was goodwill of $5,000. At 1 July 2018, all the identifiable assets and liabilities of B Ltd were recorded at amounts equal to their fair values except for:

Carrying amount and Fair value

Plant (cost $100,000) $80,000; $88,000

Land 60,000; 80,000

Inventories 40,000; 52,000

In relation to these assets:

1. The plant had an expected useful life of 4 years.

2. At 1 July 2018, subsequent to the acquisition of shares by A Ltd, B Ltd adopts the fair value basis of measurement for land. The land on hand at 1 July 2018 was sold by B Ltd on 8 February 2020. On sale any related asset revaluation surplus is transferred to retained earnings.

3. The inventory was all sold by 30 June 2019.

Additional information

1. In June 2019, B Ltd transferred $8,000 from the general reserve existing at 1 July 2018 to retained earnings. There were no other transfers relating to the general reserve in 201819.

2. At 30 June 2019, B Ltd recognised gains on revaluation of land of $6,000 in other comprehensive income for the period.

3. In June 2019, B Ltd sold inventory to A Ltd for $7000. This had originally cost B Ltd $5,000. 20% of this inventory remained unsold by A Ltd at 30 June 2019.

4. During the 201920 period, B Ltd inventory to A Ltd for $120,000. At 30 June 2020, A Ltd holds inventory sold to it by B Ltd for $20,000 which had cost B Ltd $15,000.

5. On 1 January 2019, B Ltd sold an item of inventory to A Ltd at a before tax profit of $5,000. This asset was classified as plant by A Ltd and depreciated over a 5-year period.

6. The tax rate is 30%.

7. Financial information provided by the companies at 30 June 2020 was as follows:

	A Ltd	B Ltd
Sales revenue	910,000	624,000
Other revenue	60,000	65,600
Total revenue	970,000	689,600
Cost of sales	625,000	464,000
Other expense	225,000	129,600
Total expense	850,000	593,600
Profit before tax	120,000	96,000
Tax expense	30,000	32,000
Profit for the period	90,000	64,000
Retained earnings at 1 July 2019	100,000	48,000
Transfer from asset revaluation surplus	0	14,000
Transfer to general reserve	0	12,000
Dividend paid	20,000	12,000
Dividend declared	30,000	16,000
Retained earnings at 30 June 2020	140,000	86,000
Share capital	400,000	120,000
General reserve	0	28,000
Asset revaluation surplus	0	10,000
Total equity	540,000	244,000
Provisions	40,000	30,000
Payables	30,000	40,000
Deferred tax liabilities	12,000	15,000
Non current liabilities	78,000	75,000
Total liabilities	160,000	160,000
Total equity and liabilities	700,000	404,000
Shares in B Ltd	153,400	0
Plant	800,000	320,000
Accumulated depreciation-plant	-544,000	-120,000
Land	60,000	90,000
Intangibles	75,000	60,000
Deferred tax assets	15,000	8,000
Cash	20,000	5,000
Receivables	40,600	6,000
Inventories	66,000	30,000
Goodwill	14,000	5,000
Total assets	700,000	404000

Prepare the consolidation worksheet adjusting entries for preparation of the consolidated financial statements at 30 June 2020.