On 30 June 2020 NSW Ltd acquired 100 per cent of the shares in Sydney Ltd for a cost of $1,000,000. The account balances of the two entities at the date of acquisition were:

	NSW Ltd ($)		Sydney Ltd ($)
Cash	200,000		100,000
Accounts receivable	260,000		180,000
Inventory	400,000		220,000
Property, plant and equipment	800,000		700,000
Accumulated depreciation	(240,000)		(180,000)
Land	600,000		200,000
Investment in Sydney Ltd	1,000,000		-
Accounts payable	220,000		140,000
Loans payable	400,000		380,000
Share capital	1,800,000		400,000
Retained earnings	600,000		300,000

Additional information:

• All assets of Sydney Ltd were fairly valued at acquisition except the land, which had a fair value of $280,000.
• The tax rate is 30 per cent.

Required:

(a) Prepare the consolidation journal entries

(b)

Fill in each numbered blank with an appropriate number. (5 marks)

	NSW Ltd	Sydney Ltd	Elimination and adjustments		Consolidated statement
			Dr.	Cr.
Statement of Financial Positions
Shareholders equity
Retained earnings	600,000	300,000	(1)		600,000
Share capital	1,800,000	400,000	(2)		1,800,000
Revaluation surplus recognized on consolidation	-	-	(3) (4)	(5)	-
Current liabilities
Accounts payable	220,000	140,000			360,000
Non-current liabilities
Deferred tax liability				(6)	24,000
Loans payable	400,000	380,000			780,000
	3,020,000	1,220,000			3,564,000
Current assets
Cash	200,000	100,000			300,000
Accounts receivable	260,000	180,000			440,000
Inventory	400,000	220,000			620,000
Non-current assets
Land	600,000	200,000	(7)		(8)
Plant	800,000	700,000			1,500,000
Accumulated depreciation	(240,000)	(180,000)			(420,000)
Goodwill			(9)		(9)
Investment in Sydney Ltd	1,000,000	-		(10)	-
	3,020,000	1,220,000	1,104,000	1,104,000	3,564,000