On 1 July 2018, Mallee Ltd acquired all of the issued shares (cum div.) of Fowl Ltd. At this date, the equity of Fowl Ltd consisted of: At 1 July 2018, one of the liabilities of Fowl Ltd was a dividend payable of $10,000. This was paid on 1 September 2018. One of the assets recorded by Fowl Ltd was goodwill of $5,000. Mallee Ltd uses the partial goodwill method. At 1 July 2018, all the identifiable assets and liabilities of Fowl Ltd were recorded at amounts equal to their fair values except for: In relation to these assets: The plant had an expected useful life of 4 years. At 1 July 2018, subsequent to the acquisition of shares by Mallee Ltd, Fowl Ltd adopts the fair value basis of measurement for land. The land on hand at 1 July 2018 was sold by Fowl Ltd on 8 February 2020. On sale any related asset revaluation surplus is transferred to retained earnings. The inventory was all sold by 30 June 2019. Additional information a. In June 2019, Fowl 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. b. At 30 June 2019, Fowl Ltd recognised gains on revaluation of land of $6,000 in other comprehensive income for the period. c. In June 2019, Fowl Ltd sold inventory to Mallee Ltd for $7000. This had originally cost Fowl Ltd $5,000. 20% of this inventory remained unsold by Mallee Ltd at 30 June 2019. d. During the 201920 period, Fowl Ltd inventory to Mallee Ltd for $120,000. At 30 June 2020, Mallee Ltd holds inventory sold to it by Fowl Ltd for $20,000 which had cost Fowl Ltd $15,000. e. On 1 January 2019, Fowl Ltd sold an item of inventory to Mallee Ltd at a before tax profit of $5,000. This asset was classified as plant by Mallee Ltd and depreciated over a 5-year period. f. The tax rate is 30%. g. Financial information provided by the companies at 30 June 2020 was as follows: ACW2120 Financial Accounting 2 Semester 1 2023 Group Assignment Question ACW2120 Financial Accounting 2 Semester 1 2023 Group Assignment Question Sales revenue Other revenue Total revenue Cost of sales Other expense Total expense Profit before tax Tax expense Profit for the period Retained earnings at 1 July 2019 Transfer from asset revaluation surplus Transfer to general reserve Dividend paid Dividend declared Retained earnings at 30 June 2020 Share capital General reserve Asset revaluation surplus Total equity Provisions Payables Deferred tax liabilities Non current liabilities Total liabilities Total equity and liabilities Shares in Fowl Ltd Plant Accumulated depreciation-plant Land Intangibles Deferred tax assets Cash Receivables Inventories Goodwill Total assets Required: Mallee Ltd 910,000 60,000 970,000 625,000 225,000 850,000 120,000 30,000 90,000 100,000 0 0 20,000 30,000 140,000 400,000 0 0 540,000 40,000 30,000 12,000 78,000 160,000 700,000 153,400 800,000 -544,000 60,000 75,000 15,000 20,000 40,600 66,000 14,000 700,000 Fowl Ltd 624,000 65,600 689,600 464,000 129,600 593,600 96,000 32,000 64,000 48,000 14,000 12,000 12,000 16,000 86,000 120,000 28,000 10,000 244,000 30,000 40,000 15,000 75,000 160,000 404,000 0 320,000 -120,000 90,000 60,000 8,000 5,000 6,000 30,000 5,000 404000 1. Prepare the Consolidation Worksheet Journal Entries for the preparation of consolidated financial statements by Mallee Ltd at 30 June 2020. Students are required to prepare entries based on the steps as follows: Step 1: Acquisition analysis Step 2: Business combination valuation entries Step 3: Pre-acquisition entries Step 4: Intragroup transactions Note: Students are required to put reference/number to each journal entry ACW2120 Financial Accounting 2 Semester 1 2023 Group Assignment Question Narrations for entries are required. Abbreviations are not allowed. Show ALL workings. 2. Prepare the Consolidated Worksheet for Mallee Ltd at 30 June 2020. Students may create additional accounts to post entries prepared in part (1). Note: Students are required to put reference/number to each journal entry, and these numbers/references should be shown in the consolidated worksheet. 3. Prepare the Consolidated Statement of Financial Position for Mallee Ltd at 30 June 2020 in accordance with IAS 1/AASB 101 Presentation of Financial Statements (hint: refer to Para 54). The format of the statement must be consistent with the chosen public listed companys statement, e.g net assets approach or total assets approach. Students are required to provide the link and attach the Statement of Financial Position of the chosen Bursa Malaysia company (refer next page). Note that students are NOT required to present all items that appear in the chosen companys financial statement if they are irrelevant to the assignment question. 4. Prepare a Consolidated Statement of Comprehensive Income for Mallee Ltd for the year ended 30 June 2020. The format of the statement must be consistent with the public listed companys statement, e.g nature of expense method (IAS1/AASB 101 para 102) or function of expense method (IAS1/AASB101 para 103). Students are required to provide the link and attach the Statement of Comprehensive Income (or Income Statement) of the chosen Bursa Malaysia company (refer the following page). Note that students are NOT required to present all items that appear in the chosen companys financial statement if they are irrelevant to the assignment question. Note: For requirement 3 and 4, please refer to lecture handouts Topic 1