On 1 July 2022, Gimmie Ltd. acquired all the share capital of Brown Ltd. for $300,000. At that date, Brown Ltd.s equity consisted of the following: Share Capital 150,000 General Reserve 30,000 Retained Earnings 60,000 On the date of acquisition, all the assets and liabilities of Brown Ltd. were at fair value, except for Land. Land was recorded at a cost of $120,000, but had a fair value of $100,000. Relevant financial accounts of Gimmie Ltd. and Brown Ltd. on 30 June 2023 are presented below: Relevant Accounts Gimmie Ltd. Brown Ltd. Accumulated depreciation 70,400 5,570 Cash/Banks 75,040 43,300 Cost of sales 108,000 95,000 Deferred tax asset 32,980 7,430 Deferred tax liability 27,540 10,900 Depreciation expense 18,000 3,000 Dividend paid 93,700 17,200 Dividend payable 17,000 4,900 Dividend receivable 45,000 22,000 Dividend revenue 14,500 50,000 Financial assets 10,000 5,000 Gain on financial assets 12,000 General reserve at 01/07/22 132,000 30,000 General reserve at 30/06/23 132,000 30,000 Income tax expense 59,000 30,800 Interest expense 5,000 1,400 Interest revenue 28,000 2,500 Inventories 81,000 69,700 Land 560,000 97,000 Loan payable 139,440 92,000 Loan receivable 220,000 - Other components of equity at 01/07/22 10,000 - Other components of equity at 30/06/23 30,000 Other current assets 50,000 23,900 Other expenses 2,500 3,400 Other revenue 500 55,000 Plant and equipment 358,000 51,000 Profit for the period - 43,579 70,650 Retained earnings at 01/07/22 150,000 60,000 Retained earnings at 30/06/2023 180,871 19,900 Sales revenue 500,000 205,000 Service expense 30,000 Service revenue 10,000 Share capital at 01/07/22 1,220,000 150,000 Share capital at 30/06/23 1,220,000 150,000 Shares in Brown Ltd. 300,000 - Wages and salaries expenses 380,000 70,000 Additional information 1. On 1 January 2022, Gimmie Ltd. sold inventories to Brown Ltd. for $30,000 cash. The inventory had originally cost $20,000. On 30 June 2022, Gimmie still had 20% of the inventory on hand and Page 3 of 5 the receivable was outstanding. By 30 June 2023, all the remaining inventories were sold to third parties and all receivables were paid. 2. On 1 March 2023, Brown Ltd. sold inventories to Gimmie Ltd. for $22,000 cash. The inventory had originally cost $16,000. On 30 June 2023, Gimmie Ltd. still had 65% of the inventory on hand. 3. On 1 November 2022, Brown Ltd. borrowed $58,000 from Gimmie Ltd. at an annual interest rate of 1.9%. The term of the loan was for a 2-year interest-only loan with interest payable annually. On 30 June 2023, all interest was paid. 4. On 1 October 2022, Brown Ltd. Sold a machine to Gimmie Ltd. For $40,000 cash. The machine had originally cost $29,500 and had a carrying amount of $11,800 at the time of the sale. Gimmie Ltd. Depreciates the asset at 5% per annum using a straight-line approach with an estimated $2,000 residual value. Brown Ltd. had been depreciating the asset at 10% per year on a straight-line basis with no residual value. 5. On 30 June 2023, Gimmie Ltd. declared a dividend of $37,000. On the same day, Brown Ltd. also declared a dividend of $12,000. Gimmie Ltd recognises dividends when declared. The tax rate is 30%. The depreciation method is straight-line. Required Question 1 a (1 mark) Prepare the acquisition analysis and the required adjustments for consolidation on 1st July 2022. Question 1 b (3 marks) Prepare the consolidated worksheet with all detailed adjustment entries. You must show your workings for the consolidated reports ended on 30 June 2023. Question 1 c (8 marks) Prepare the consolidated financial statements (including the consolidated income statement, consolidated financial position and statement of changes in equity) for the period ended 30 June 2023.