Part A - Consolidation Question On 01/07/2020, Forte Ltd acquired 100% of the issued shares of Piano Ltd for: At the date of acquisition, the Owners' Equity of Piano Ltd consisted of: Share capital General Reserve Retained earnings The accounts of the two companies appear as at 30/06,/2023 are as follows: Sales less Cost of Goods Sold Depreciation expense Interest expense Other expenses Other Income plus Interest revenue Dividend revenue less Income tax expense Net Profit after Tax Forte Ltd $ 3,603,500 2,162,100 180,100 144,100 317,500 32,800 197,000 308,800 720,700 $2,252,000 $1,013,400 $253,400 $189,960 $1,456,760 Piano Ltd S 1,815,600 1,180,100 90,700 21,905 90,695 129,600 302,600 Retained earnings (01,/07/2022) 1,080,900 316,600 Available for appropriation 1,801,600 619,200 Interim dividend paid 168,900 84,400 Final dividend declared 281,500 112,600 Retained earnings (30/06/2023) 1,351,200 422,200 Share Capital 2,927,600 1,013,400 General Reserve 225,200 253,400 Total Owner's Equity 4,504,000 1,689,000 Loan payable (due 30/06/2025) 0 337,000 Dividend payable 281,500 112,600 Deferred Tax Liability 337,800 28,100 Other liabilities 506,700 85,300 Total Liabilities 1,126,000 563,000 Total Liabilities & Owner's Equity 5,630,000 2,252,000 Assets Dividend receivable 112,600 0 Inventory 788,200 135,100 Property, Plant & Equipment 1,520,100 900,800 Accumulated depreciation -608,100 -180,200 f e mpg ot et e g e g Accumulated depreciation -608,100 -180,200 Land 957,100 900,800 Investment in Piano Ltd 2,252,000 0 Loan receivable 337,000 0 Other assets 271,100 495,500 Total Assets 5,630,000 2,252,000 Additional information: (a) At date of acquisition, all identifiable net assets of Piano Ltd were recorded at fair value, with the exception of a item of Equipment in the books of Piano Ltd. The item of Equipment had cost of 5495,440, and an accumulated depreciation of $99,110. The management of Forte Ltd believed the item of Equipment had a fair value of $515,229 and a remaining useful life of 5 years. (b) The directors apply the impairment test for goodwill annually. As at 30/06/2023, the cumulative goodwill impairment write-downs for prior years totalled $625,000. During the current year, the goodwill has further been impaired by another $9,375. (c) An item of Equipment owned by Piano Ltd was sold to Forte Ltd on 01/01/2021 for $296,167. The cost of the Equipment was $270,240 and its accumulated depreciation was $54,060 at the time of trasnfer. Forte Ltd estimated this item had an annual depreciation rate of 20% with no residual value. (c) An item of Equipment owned by Piano Ltd was sold to Forte Ltd on 01/01/2021 for $296,167. The cost of the Equipment was $270,240 and its accumulated depreciation was 554,060 at the time of trasnfer. Forte Ltd estimated this item had an annual depreciation rate of 20% with no residual value. (d) The opening inventory of Forte Ltd includes unrealised profit of $236,000 on inventory transferred from Piano Ltd during the prior financial year. All of this inventory was sold by Forte Ltd to parties external to the Group by 30/06/2023. (e) During the financial year ending on 30/06/2023, Forte Ltd purchased inventory from Piano Ltd for $1,024,000. This inventory had previously cost Piano Ltd 5409,000. By 30/06,/2023, 65% of this inventory was sold to outsiders by Forte Ltd. (f) Piano Ltd borrowed a loan from Forte Ltd amounting to $337,000 at the start of the current period. On 30/06/2023, Piano Ltd paid the annual interest for the intra group loan at a rate of 6.50%. (g) During the current year, Forte Ltd paid Arina Ltd, an external party for management fees expense amouning to $2,000 (i) The tax rate is: 30% Ref. Accounts Dr Cr (a) FV adjustments (b) Pre-acquisition elimination entries