On 1 July 2020, Jupiter Ltd acquired all the issued shares (cum div.) of EON Ltd for $588,000. At this date the equity of EON Ltd consisted of Share capital $260,000 Retained eamings 195,000 On 1 July 2020, EON Ltd had recorded a dividend payable of $18,000, which was subsequently paid in July 2020. All of the identifiable assets and liabilities of EON Ltd were recorded at amounts equal to their fair values except for the following: Carrying amount Fair value Inventory $300,000 $340,000 Plant (accumulated depreciation of 800,000 850,000 $200,000) of the inventory on hand at 1 July 2020, only 20% remained unsold by 30 June 2021. The plant on hand at the date of acquisition was expected to have a further useful life of 5 years. The companies in the group use the straight line method of depreciation. During the 2020-21 year, the following transactions occurred: Jupiter Ltd sold inventory to EON Ltd for $50,000 at a profit before tax of $10,000. This inventory had originally cost Jupiter Ltd $40,000. This inventory was still on hand in the books of EON Ltd at 30 June 2021. Jupiter Ltd charged EON Ltd management fees of $24,000. This amount was paid by 30 June 2021. On 1 January 2021, Jupiter Ltd sold fumiture to EON Ltd for $40,000, with a gain on sale of $6,000. The furniture was considered to have a further 5-year life. At 30 June 2021, an impairment test was conducted on EON Ltd and this resulted in the recognition of an impairment loss on the goodwill on acquisition of $12,000 (this has no tax effect). At 30 June 2021, the directors of EON Ltd declared a dividend of $13,000. This dividend remained unpaid at the end of the year. The tax rate is 30% (iv) (v) (vi) The following financial information was provided by the companies at 30 June 2021: EON Ltd $59 000 Sales revenue Dividend revenue Other income Gains on sale of non-current assets Total income Cost of sales Other expenses Total expenses Profit before income tax Income tax expense Profit for the year Retained camings (1/7/20) Jupiter Ltd $162 500 19 000 62 500 12 500 256 500 (92 500) (10 500) (103 000) ( 153 500 (45 000) 108 500 205 000 313 500 (10 000) 5 000 5 000 69 000 (45000) (2 500) (47 500) 21 500 (6 500) 15 000 195 000 210 000 (6 000) ( (13 000) $191 000 Interim dividend paid Dividend declared Retained eamings (30/6/21) $303 500 Required: a) Prepare the acquisition analysis as at 1 July 2020. (5 marks) b) Prepare the journal entries necessary to prepare consolidated financial statements as at the date of acquisition on 1 July 2020 (8 marks) c) Prepare the journal entries necessary to prepare consolidated financial statements as at 30 June . (22 marks) 2021. (Show all workings and narrations) On 1 July 2020, Jupiter Ltd acquired all the issued shares (cum div.) of EON Ltd for $588,000. At this date the equity of EON Ltd consisted of Share capital $260,000 Retained eamings 195,000 On 1 July 2020, EON Ltd had recorded a dividend payable of $18,000, which was subsequently paid in July 2020. All of the identifiable assets and liabilities of EON Ltd were recorded at amounts equal to their fair values except for the following: Carrying amount Fair value Inventory $300,000 $340,000 Plant (accumulated depreciation of 800,000 850,000 $200,000) of the inventory on hand at 1 July 2020, only 20% remained unsold by 30 June 2021. The plant on hand at the date of acquisition was expected to have a further useful life of 5 years. The companies in the group use the straight line method of depreciation. During the 2020-21 year, the following transactions occurred: Jupiter Ltd sold inventory to EON Ltd for $50,000 at a profit before tax of $10,000. This inventory had originally cost Jupiter Ltd $40,000. This inventory was still on hand in the books of EON Ltd at 30 June 2021. Jupiter Ltd charged EON Ltd management fees of $24,000. This amount was paid by 30 June 2021. On 1 January 2021, Jupiter Ltd sold fumiture to EON Ltd for $40,000, with a gain on sale of $6,000. The furniture was considered to have a further 5-year life. At 30 June 2021, an impairment test was conducted on EON Ltd and this resulted in the recognition of an impairment loss on the goodwill on acquisition of $12,000 (this has no tax effect). At 30 June 2021, the directors of EON Ltd declared a dividend of $13,000. This dividend remained unpaid at the end of the year. The tax rate is 30% (iv) (v) (vi) The following financial information was provided by the companies at 30 June 2021: EON Ltd $59 000 Sales revenue Dividend revenue Other income Gains on sale of non-current assets Total income Cost of sales Other expenses Total expenses Profit before income tax Income tax expense Profit for the year Retained camings (1/7/20) Jupiter Ltd $162 500 19 000 62 500 12 500 256 500 (92 500) (10 500) (103 000) ( 153 500 (45 000) 108 500 205 000 313 500 (10 000) 5 000 5 000 69 000 (45000) (2 500) (47 500) 21 500 (6 500) 15 000 195 000 210 000 (6 000) ( (13 000) $191 000 Interim dividend paid Dividend declared Retained eamings (30/6/21) $303 500 Required: a) Prepare the acquisition analysis as at 1 July 2020. (5 marks) b) Prepare the journal entries necessary to prepare consolidated financial statements as at the date of acquisition on 1 July 2020 (8 marks) c) Prepare the journal entries necessary to prepare consolidated financial statements as at 30 June . (22 marks) 2021. (Show all workings and narrations)