On 1 July 2019, Foster Ltd acquired 100 of the issued ordinary shares of Bambino Ltd for $750000 At the time of acquisition, all identifiable assets and assumed liabilities of Bambino Ltd were recorded at fair value, except for land which had a fair value of $340000, which was $90000 greater than the book value in Bambino Ltd accounts The shareholders equity of the company was as follows Share capital (ordinary shares) $ 450000 General reserve $ 60000 Retained earnings $220000 The following information relates to the year ending 30 June 2022 During the year, Foster Ltd provided management services to Bambino Ltd for $30000 Bambino Ltd sold inventory to Foster Ltd for $23000 This inventory cost Bambino Ltd $16000 At 30 June 2022, Foster Ltd was still holding 40 of this inventory Bambino Ltd paid 2 45 interest for the year to Foster Ltd on an intra group loan of $300000 On 30 June 2022, it was determined that goodwill on acquisition was impaired by $120000 In the previous year, impairment of goodwill amounting to $80000 had been recorded as part of the consolidation process On 1 July 2021, Foster Ltd sold equipment to Bambino Ltd for $60000 The equipment had been purchased by Foster Ltd for $80000 on 1 July 2018 and was being depreciated on a straight line over 8 years with no residual value Cosistent with the original estimate, Bambino Ltd depreciates the asset over the remaining effective life on a straight line basis with no residual value The company tax rate is 30 Required Prepare all necessary consolidation journal entries, including any related income tax entries, as at 30 June 2022 according to the requirements of AASB 10 consolidated Financial Statements

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Posted on Nov 25, 2021

On 1 July 2019, Foster Ltd acquired 100% of the issued ordinary shares of Bambino Ltd for $750000. At the time of acquisition, all identifiable

On 1 July 2019, Foster Ltd acquired 100% of the issued ordinary shares of Bambino Ltd for $750000. At the time of acquisition, all identifiable assets and assumed liabilities of Bambino Ltd were recorded at fair value, except for land which had a fair value of $340000, which was $90000 greater than the book value in Bambino Ltd accounts. The shareholders’ equity of the company was as follows:

Share capital (ordinary shares) $ 450000

General reserve $ 60000

Retained earnings $220000

The following information relates to the year ending 30 June 2022:

During the year, Foster Ltd provided management services to Bambino Ltd for $30000.

Bambino Ltd sold inventory to Foster Ltd for $23000. This inventory cost Bambino Ltd $16000. At 30 June 2022, Foster Ltd was still holding 40% of this inventory.

Bambino Ltd paid 2.45% interest for the year to Foster Ltd on an intra-group loan of $300000.

On 30 June 2022, it was determined that goodwill on acquisition was impaired by $120000. In the previous year, impairment of goodwill amounting to $80000 had been recorded as part of the consolidation process.

On 1 July 2021, Foster Ltd sold equipment to Bambino Ltd for $60000. The equipment had been purchased by Foster Ltd for $80000 on 1 July 2018 and was being depreciated on a straight line over 8 years with no residual value. Cosistent with the original estimate, Bambino Ltd depreciates the asset over the remaining effective life on a straight-line basis with no residual value.

The company tax rate is 30%.

Required

Prepare all necessary consolidation journal entries, including any related income tax entries, as at 30 June 2022 according to the requirements of AASB 10 consolidated Financial Statements.