On 1/07/2017 Yokiko Led acquired: 100% of the issued shares of Noriku Led for: $3,092,000 At the date of acquisition, the Owners' Equity of Noriku Led consisted of: Share capital $1,391,400 Plant replacement reserve 5347,900 Retained earnings $260,820 $2,000,120As at 30/06/2020 The accounts of the two companies appear as follows: Yokiko Led Noriku Led $ Sales 4,947,500 2,493,000 less Cost of Goods Sold 2,968,500 1,620,400 Depreciation expense 247,300 124,600 Interest expense 197,900 60,190 Other expenses 481,000 94,310 Other Income plus Interest revenue 90,200 Dividend revenue 270,500 less Income tax expense 424,000 178,000 Net Profit after Tax 989,500 415,500 Retained earnings (01/07/2019) 1,484,100 434,700 Available for appropriation 2,473,600 850,200 Interim dividend paid 231,900 115,900 Final dividend declared 386,500 154,600 Retained earnings (30/06/2020) 1,855,200 579,700 Share Capital 4,019,600 1,391,400 Plant replacement reserve 309,200 347,900 Total Owner's Equity 6,184,000 2,319,000 Loan payable (due 30/06/2022) 463,000 Dividend payable 386,500 154,600 Deferred Tax Liability 463,800 38,600 Other liabilities 695,700 116,800 Total Liabilities 1,546,000 773,000 Total Liabilities & Owner's Equity 7,730,000 3,092,000Assets Dividend receivable 154,600 Inventory 1,082,200 185,500 Property, Plant & Equipment 2,087,100 1,236,800 Accumulated depreciation -834,900 -247,400 Land 1,314,100 1,236,800 Investment in Noriku Ltd 3,092,000 Loan receivable 463,000 0 Other assets 371,900 680,300 Total Assets 7,730,000 3,092,000 Additional information: a) At date of acquisition, all identifiable net assets of Noriku Led were recorded at fair value, with the exception of a block of land in the books of Noriku Ltd. The block of land had a carrying value of: $1,236,800 and a fair value of: $1,730,000 b) The directors apply the impairment test for goodwill annually. Asat 30/06/2020 The cumulative goodwill impairment write downs for prior years totalled: $597,000 On 1/07/2018 c) An equipment owned by Noriku Led was sold to Yokiko Ltd. Cost of the equipment was: $552,000 Accumulated depreciation of the equipment was: $197,000 The asset was sold for: $494,000 Yokiko Led estimated this item had a remaining useful life of: 5 years and residual value of: 50d) The opening inventory of Yokiko Led includes unrealised profit of: $324,000 on inventory transferred from Noriku Led during the prior financial year. All of this inventory was sold by Yokiko Led to parties external to the By 30/06/2020 Group. e) During the current year, Yokiko Led purchased inventory from Noriku Ltd for: $1,406,000 This inventory had previously cost Noriku Ltd: $562,000 Percentage of this inventory sold to outsiders by Yokiko Led during the year was: 50% f) Noriku Led borrowed a loan from Yokiko Led amounting to: $463,000 On 30/06/2020 Noriku Led paid the annual interest for the intra group loan at a rate of: 13% g) During the current year, Yokiko Led paid Avenge Ltd, an external party for management fees expense amouning to: $2,000 h) The following are dividends paid and declared by Noriku Led to Yokiko Ltd: Interim dividend paid 115,900 Final dividend declared 154,600 i) The tax rate is: 30%Consolidated Journal Entries For The Year Ended 30/6/2020 Accounts Dr Cr A. Revaluation of land to fair value Land $493,200 BCVR $345,240 DTL $147,960 Elimination of the Investment in Noriku Lid and recognition of Goodwill Share capital $1,391,400 Retained earnings $260,820 Plant placement reserve $347,900 BCVR $345,240 Goodwill $746,640 Investment in to Noriko Lid $3,092,000 B. Goodwill Impairment Retained Earnings $597,000 Accumulated impairment - Goodwill $597,000 C. Elimination of Intra-group sale of inventory and unrealised profit in Noriku Led and Restatement of overstated inventory Sales $1,406,000 Cost of goods sold $984,000 Inventory $422,000 Deferred Tax Asset $126,600 Income Tax Expense $126,600 D. Elimination of unrealised profit in opening inventory Retained Earnings $226,800 Income Tax Expense $97,200 Cost of goods sold $324,000C. Profit/Loss on the sale of non-current Asset - Equipment Equip ment $197,000 Accumulated depreciation $197,000 Retained earnings $97,300 Deferred Tax Assets $41,700 Equip ment $139,000 Adjusting Depreciation after the sale of non-current asset --> Equipment Accumulated Depreciation - Equipment $55,600 Depreciation expense $27,800 Retained earnings 527,800 [for 2 years --> 2 x (494,000 - 355,000] /51 Income tax expense $8,340 Retained earnings $8,340 Deferred tax asget $16,680 F. Elimination of intragroup Loan Loan Payable $463,000 Loan recievable $463,000 Elimination of Intragroup interest on intra group loan Interest revenue $60,190 Interest expense $60,190 H. Elimination of Final Dividend Declared Dividend Payable $154,600 Divdend Declared $154,600 Dividend Revenue $154,600 Dividend Recievable $154,600 Elimination of interim Dividend Paid Dividend Revenue $115,900 Dividend paid $115,900