On 1 July 2022, Pine Ltd. acquired all the share capital of Island Ltd. for $250,000. At that date, Island Ltd.s equity consisted of the following: Share Capital 100,000 General Reserve 20,000 Retained Earnings 30,000 On the date of acquisition, all the assets and liabilities of Island Ltd. were at fair value, except Land was recorded at a cost of $100,000 but had a fair value of $120,000. Relevant financial accounts of Pine Ltd. and Island Ltd. on 30 June 2023 are presented below:

Relevant Accounts Pine Ltd. Island Ltd. Accumulated depreciation 110,500 22,000 Cash/Banks 70,540 54,000 Cost of sales 177,000 105,000 Deferred tax asset 82,060 5,000 Deferred tax liability 11,000 8,000 Depreciation expense 180,000 5,000 Dividend paid 81,000 16,500 Dividend payable 51,000 40,000 Dividend receivable 45,000 32,000

Page 2 of 3 Dividend revenue 14,500 50,000 Financial assets 20,000 - Gain on financial assets 12,000 General reserve at 01/07/22 358,000 20,000 General reserve at 30/06/23 358,000 Income tax expense 38,000 38,700 Interest expense 5,000 1,400 Interest revenue 28,000 2,500 Inventories 110,000 80,000 Land 650,000 80,000 Loan payable 102,100 201,000 Loan receivable 250,000 - Other components of equity at 01/07/22 10,000 - Other components of equity at 30/06/23 20,000 Other current assets 32,000 11,000 Other expenses 2,500 3,400 Other revenue 500 55,000 Plant and equipment 890,000 55,000 Profit for the period 30,325 21,000 Retained earnings at 01/07/22 150,000 30,000 Retained earnings at 30/06/2023 7,000 106,500 Sales revenue 570,000 285,000 Service expense 40,000 Service revenue 120,000 Share capital at 01/07/22 1,600,000 100,000 Share capital at 30/06/23 1,600,000 Shares in Island Ltd. 250,000 - Wages and salaries expenses 280,000 178,000 Additional information 1. On 1 January 2022, Pine Ltd. sold inventories to Island Ltd. for $45,000 on credit. The inventory had originally cost $30,000. On 30 June 2022, Pine still had 65% of the inventory on hand and all the receivables were outstanding. By 30 June 2023, all the remaining inventories were sold to third parties and all receivables were paid. 2. On 1 March 2023, Island Ltd. sold inventories to Pine Ltd. for $9,000 cash. The inventory had originally cost $4,000. On 30 June 2023, Pine Ltd. still had 20% of the inventory on hand. 3. On 1 November 2022, Island Ltd. borrowed $24,000 from Pine Ltd. at an annual interest rate of 2.5%. It is a 2-year interest-only loan with interest payable yearly. On 30 June 2023, all interest was paid. 4. On 1 October 2022, Island Ltd. sold a machine to Pine Ltd. for $18,000 cash. The machine had originally cost $15,000 and had a carrying amount of $3,000 at the time of the sale. Pine Ltd. depreciates the asset at 10% per annum straight-line with a $1,000 residual amount. Island Ltd. had been depreciating the asset at 5% per year on a straight-line basis with no residual.

5. On 30 June 2023, Pine Ltd. declared a dividend of $81,000. On the same day, Island Ltd. also declared a dividend of $16,500. Pine Ltd recognises dividends when declared. The tax rate is 30%.

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.