On 1 July 20X3 Pepe Ltd gained control of Kitty Ltd by buying 70% of its shares for $59,000. At this date Kitty had share capital $40,000 and retained profits $35,000. Financial statements for the year ended 30 June 20X5 are shown in the worksheet attached.

* Intercompany sales of the 20X5 financial year totalled $40,000.

* Pepe holds inventory purchased from Kitty in 20X5. The mark up was $1,930.

* Pepe has paid 17% interest on the loan from Kitty.

* Goodwill impairment is $750 in year ended 20X4 and $850 in 20X5.

* Dividends are paid out of current period profit.

* Pepe has other share investments (not consolidated).

* On July 1 20X4 Pepe purchased an impressionist painting (included in Other Assets) from Kitty for $20,000. The carrying amount of the painting to Kitty had been $15,000, its fair value. As it is an artwork the painting is not depreciable.

REQUIRED

Complete the consolidation worksheet as below:

Combined consolidation worksheet as at 30 June 20X5 Pepe Kitty Sum Eliminations Group Allocation to Dr Cr NCI Parent Sales 94 000 82 000 176 000 Cogs 57 000 36 000 93 000 Gross profit 37 000 46 000 83 000 Other revenues 17 000 8 000 25 000 Other expenses (22 000) (36 000) (58 000) Net profit 32 000 18 000 50 000 Retained profits 1 July 20X4 6 600 38 000 44 600 Profit available 38 600 56 000 94 600 less Dividends 27 000 15 000 42 000 Retained profits 11 600 41 000 52 600 Capital 90 000 40 000 130 000 Owners 'equity 101 600 81 000 182 600 Dividend payable 27 000 15 000 42 000 Loan from Kitty 46 000 46 000 Other liabilities 12 000 52 000 64 000 Total equities 186 600 148 000 334 600 Inventory 23 400 26 000 49 400 Divi'd receivable 10 750 10 750 Loan to Pepe 46 000 46 000 Investm't in Sub 59 000 59 000 Other assets net 93 450 76 000 169 450 186 600 148 000 334 600