Part A $-$ Consolidation Question

Additional information:

$($a$)$ At date of acquisition, all identifiablenet assets of Fortepiano Ltd were recorded at fair value, with the exception of a item of Machinery in the books of Fortepiano Ltd$.$Theitem of Machinery had cost of $$1,216,800,$ and an accumulated depreciation of $$243,375.$ The management of Sforzando Ltd believed theitem of Machinery had a fair value of $$1,460,138$ and a remaining useful life of $5$ years.

$($b$)$ The directors apply the impairment test for goodwill annually. As at $30/06/23,$ the cumulative goodwill impairment write$-$downs for prior years totalled $$1,009,000.$ During the current year, the goodwill has been futher impaired by another $$15,135$

$($c$)$ An item of Equipment owned by fortepiano Ltd was sold to Sforzando Ltd on $01/01/2022$ for $$193,387.$ Thecost of the Equipment was $$162,240$ and its accumulated depreciation was $$32,450$ at the time of trasnfer. Sforzando Ltd estimated this item had an annual depreciation rateof $10\%$ with no residual value.

$($d$)$ The opening inventory of Sforzando Ltd includes unrealised profit of $$425,000$ on inventorytransferred from fortepiano Ltd during the prior financial year. All of this inventory was sold by Sforzando Ltd to parties external to the Group by $30/06/2023.$

$($e$)$ During thefinancial year ending on $30/06/2023,$ Sforzando Ltd purchased inventory from Fortepiano Ltd for $$1,845,000.$ This inventory had previously cost Fortepiano Ltd $$738,000.$ By $30/06/2023,45\%$ of this inventory was sold to outsiders by Sforzando Ltd$.$

$($f$)$ Fortepiano Ltd borrowed a loan from Sforzando Ltd amounting to $$608,000$ at thestart of thecurrent period. On $30/06/2023,$ Fortepiano Ltd paid the annual interest for the intragroup loan at a rate of $10\mathrm{.}50\%.$

$($g$)$ During the current year, Sforzando Ltd paid Arina Ltd$,$ an external party for management fees expense amounting to $$2,000$

REQUIRED:

$($i$)$ Prepare the acquisition analysis at the date of acquisition.

$($ii$)$ Record the consolidated journal entries necessary to prepare consolidated accounts for the year ending $30/06/2023$ for the group comprising Tie Ltd and Legato Ltd$.$

$($iii$)$ Complete the consolidated worksheet for the year ending

$-$ Entering the consolidated journal entries in Part $($ii$)$ above to the appropriate debit and credit

columns in the Consolidated Worksheet; and

$-$ Clearly labelling the references for each of the adjustments in the Consolidated Worksheet; and

$-$ Completing the Group figures in the Consolidated Worksheet