On 1 July 2019, Parent Ltd acquired all the shares of Son Ltd, on a cum-div. basis, for $1,100,000. At this date, the equity of Son Ltd consisted of:

Share capital 700 000 shares $ 1,050,000 Retained earnings 650,000

Son Ltd also reported a dividend payable of $100,000 and a recorded goodwill of $150,000 at the acquisition date. The dividend payable was subsequently paid in September 2019.

At the acquisition date, all the identifiable assets and liabilities of Son Ltd were recorded at amounts equal to fair value except for the following:

Carrying amount Fair value

Inventory 100,000 80,000

Plant (cost $1,000 000) 800 000 700,000

Of the inventory on hand in Son Ltd at 1 July 2019, 60 percent was sold in December 2019 and the remainder was sold in August 2020.

The remaining useful life of the plant at the date of acquisition was 5 years. The plant on hand at the acquisition date was sold on 1 January 2021 for $500,000.

The company applies the partial goodwill method. The income tax rate is 30%.

(T1) On 1 January 2020, Parent Ltd acquired furniture for $200,000 from Son Ltd. The furniture had originally cost Son Ltd $200,000 and had a carrying amount at the time of sale of $160,000. The sale was made on credit. At 30 June 2020, $120,000 was outstanding. At 30 June 2021, $40,000 was still not paid and outstanding. Both entities apply depreciation on a straight-line basis. At 1 January 2020, the furniture had a further five years of useful life, with zero residual value.

(T2) On 1 March 2020, Son Ltd sold inventory costing $120,000 to Parent Ltd for $100,000. On 1 October 2020, Parent Ltd sold half of these inventory items back to Son Ltd for $60,000. Of the remaining inventory kept by Parent Ltd, half was sold in March 2021 to Dingo Ltd at a profit of $10,000.

Prepare the consolidation worksheet entries at 30 June 2021. Your answer should include:

1. BCVR entries,

2. Pre-acquisition entries

3. Intragroup transaction adjustment entries (T1 to T2).