On 1 July 2019, Batman Ltd acquired all the issued shares (cum div.) of Robin Ltd for $150000. At this date the equity of Robin Ltd consisted of:

Share capital

$75000

Retained earnings

22500

At this date, Robin Ltd had recorded a dividend payable of $22 500 which was paid in August 2019. All the identifiable assets and liabilities of Robin Ltd were recorded at amounts equal to fair values except for inventory for which the fair value was $3 000 greater than carrying amount. Only 10% of the inventory on hand at 1 July 2019 remained unsold by 30June 2020. The tax rate is 30%.

During the 2019-20 period, the following transactions occurred.

(a) Batman Ltd sold inventory to Robin Ltd for $90 000 at a profit before tax of $18 000. At30 June 2020, inventory which was sold to Robin Ltd for $37 500 at a profit before tax of $7 500 was still on hand in the records of Robin Ltd.

(b) On 1 January 2020, Batman Ltd sold machinery to Robin Ltd at a gain of $15 000. The machinery was considered to have a further 5-year life.

(c) During the period Robin Ltd rented a warehouse from Batman Ltd, paying $3 750 in rent to Batman Ltd.

(d) During the period Batman Ltd recorded gains from revaluation of land, which is measured using the fair value method. These gains increased the asset revaluation surplus by $6 000 to give a balance of $42 000 at 30 June 2020.

(e) In June 2020, an impairment test was conducted on Robin Ltd and resulted in the recognition of impairment losses on goodwill of $24 000 (recognised in other expenses)

The following financial information was provided by the companies at 30 June 2020:

Batman Ltd

Robin Ltd

Sales revenue

$187500

$177000

Dividend revenue

7500

Other income

7500

15000

Gains on sale of non-current assets

7500

15000

Total income

210000

207000

Cost of sales

(157500)

(135000)

Other expenses

(22500)

(7500)

Total expenses

(180000)

(142500)

Profit before income tax

30000

64500

Income tax expense

(10 125)

(14 625)

Profit for the year

19 875

49 875

Retained earnings (1/7/19)

45000

22500

64 875

72 375

Dividend paid

(18 750)

(7500)

Retained earnings (30/6/20)

$46 125

$64 875

Required:

A. Prepare the acquisition analysis and journals at 1 July 2019.

B.Prepare the journals at 30 June 2020

C.Prepare the worksheet for consolidated statement of profit or loss and other comprehensive income, the consolidated statement of profit or loss and other comprehensive income consolidated statement of changes in equity for Batman Ltd. (You may use the suggested templates)