Parent Ltd has asked for your help in the preparation of consolidated financial statements for the financial year ended 31 March 2022; they value your understanding of NZ IFRS 10 Consolidated Financial Statements and NZ IFRS 3 Business Combinations. Parent Ltd sent you the following information: - The equity in Subsidiary Ltd was acquired on 1 April 2013. At that date the equity of Subsidiary Ltd comprised: Share capital balance of $100000 and Retained eamings of $30000. - The identifiable net assets of Subsidiary Ltd were not fairly valued on 1 April 2013 because: Subsidiary Ltd had an internally generated intangible asset with an estimated fair value of $15000. Subsidiary Ltd uses the cost model for its property, plant and equipment (PPE); the cost of the PPE was $70000 and the fair value was estimated to be $95000. - Prior years' impairment of total goodwill amounted to $3000. For the current year ended 31 March 2022 the directors of Parent Ltd believe that the total goodwill has been further impaired by $4000. Question 3 continued: - During the month ended 31 March 2021 Subsidiary Ltd made sales to Parent Ltd of $30000 and recognised a profit of $5000. Parent Ltd sold this purchase of inventory to Pink Ltd on 15 May 2021. - During the month ended 31 March 2022 Subsidiary Ltd made sales to Parent Ltd of $7000 and recognised a profit of $3200. This purchase remained in the inventory of Parent Ltd as at 31 March 2022. - During the month ended 31 March 2022 Parent Ltd made sales to Subsidiary Ltd of $3000 and recognised a profit of $900. Subsidiary Ltd sold this purchase of inventory to Ford Ltd on 5 April 2022. - Subsidiary Ltd billed Parent Ltd $4200 for consulting advice provided on 28 February 2022. This transaction had been recognised by both entities; it remained unpaid as at 31 March 2022 . Required: (a) Assume Parent Ltd acquired 100\% of the equity in Subsidiary Ltd for $200,000 on 1 April 2013. Complete the consolidation worksheet in the answer book for Parent Ltd for the financial year ended 31 March 2022 in accordance with NZ IFRS 3 and NZ IFRS 10. You must present your notional joumal entries as workings. (b) Assume Parent Ltd only acquired 70% of the equity in Subsidiary Ltd for $140000 on 1 April 2013. Prepare the notional joumal entry as at 31 March 2022 to identify the non-controlling interest, in Subsidiary Ltd, to be reported in the group accounts in accordance with NZ IFRS 10. The directors of Parent Ltd require the non-controlling interest in Subsidiary Ltd to be measured at the non-controlling interest's proportionate share of the Subsidiary Ltd's identifiable net assets i.e. not at fair value. (c) Assume Parent Ltd only acquired 70% of the equity in Subsidiary Ltd for $140000 on 1 April 2013 Prepare the notional joumal entry as at 31 March 2022 to identify the non-controlling interest, in Subsidiary Ltd, to be reported in the group accounts in accordance with NZ IFRS 10. The directors of Parent Ltd now require the non-controlling interest to be measured at fair value. (d) Reconcile your NCI (b) balance answer above to your NCI (c) answer above. (e) Explain your consolidation treatment of the sale of inventory from Subsidiary Ltd to Parent Ltd during March 2022 . \begin{tabular}{|l|l|l|l|l|} \hline \multicolumn{6}{|c|}{ QUESTION 3_(b) Notional journal entry for the NCI not measured at FV } \\ \hline 31/03/22 & & $ & $ \\ \hline & & & & \\ \hline & & & & \\ \hline & & & & \\ \hline & & & & \\ \hline & & & & \\ \hline & & & & \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline QUESTION 3 (d) Reconcile your NCI (b) answer to your NCI (c) answer. \\ \hline My NCI in (b) was: & $ \\ \hline & \\ \hline & \\ \hline & \\ \hline & $ \\ \hline My NCI in (c) was: & \\ \hline \end{tabular} (e) Explain your consolidation treatment of the sale of inventory from Subsidiary Ltd to Parent Ltd during March 2022