On 1 July 20X1, Parent Ltd acquired 70% of the shares of Subsidiary Ltd for $440000. Parent Ltd used the full goodwill method and the fair value of the non-controlling interest at 1 July 20X1 was $132000. The tax rate is 30%.

At this date the equity of Subsidiary Ltd consisted of:

Retained earnings

$99000

Share capital

$198000

General reserve

$33000

At this date, all the identifiable assets and liabilities of Subsidiary Ltd had carrying amounts equal to their fair values except for:

Carrying amount

Fair value

Plant (cost $62000)

$38000

$44000

Inventories

$37200

$49600

Plant had a further useful life of 3 years with no expected residual value. The benefits were evenly distributed across its useful life.By 30 June 20X2, all the inventories were sold to entities outside the group.

Subsidiary Ltd recorded the changes in equity during the year ended 30 June 20X3 as follows.

Profit for the year(after tax)

$62400

Retained earnings at 1 July 20X2

$104000

$166400

Dividend paid

($20800)

Dividend declared

($12480)

Transfer to general reserve*

($10400)

($43680)

Retained earnings at 30 June 20X3

$122720

Asset Revaluation Surplus at 30 June 20X2**

$2080

Asset Revaluation Surplus at 30 June 20X3**

$4160

* from post-acquisition equity

**resulted from movement in fair value of financial assets

REQUIRED:

NB:Round all your answers to the nearest dollar amount.If you believe no journal entry is required, select NULL for the account name, NA for the Dr or Cr, and enter 0 for the amount.Do not leave the amount blank. Do not enter dollar ($) signs or commas (i.e. enter 10000 not $10,000).

(a)Prepare the acquisition analysis at acquisition date;

(b)Prepare the business combination valuation entries for the year ended at30 June 20X3in the consolidation worksheet;

(c)Prepare the pre-acquisition entries for the year ended at30 June 20X3in the consolidation worksheet;

(d)Prepare the journal entries to allocate the NCI share of equity atacquisition date for the year ended at 30 June 20X3in the consolidation worksheet;

(e)Prepare the journal entries to allocate the NCI share of changes in equity from1 July20X1 to 30 June 20X2in the consolidation worksheet;

(f)Prepare the journal entries to allocate the NCI share of changes in equity from1 July 20X2 to 30 June 20X3in the consolidation worksheet.

(g)Prepare the journal entries to account for adjustments related to the intra-group dividend transactions for the year ended30 June 20X3in the consolidation worksheet.