Piano Ltd has a 30% interest in a joint venture, Mandolin Ltd, in which it invested $50 000 on 1 July 2014. The equity of Mandolin Ltd at the acquisition date was:

Share capital Retained earnings

$ 30 000 120 000

All the identifiable assets and liabilities of Mandolin Ltd were recorded at amounts equal to their fair values. Profits and dividends for the years ended 30 June 2015 to 2017 were as follows:

		Profit before tax				Income tax expense				Dividends paid
	2015 2016 2017		$80 000 70 000 60 000				$30 000 25 000 20 000				$80 000 15 000 10 000	*

Required

A. Prepare journal entries in the records of Piano Ltd for each of the years ended 30 June 2015 to 2017 in relation to its investment in the joint venture, Mandolin Ltd. (Assume Piano Ltd does not prepare consolidated financial statements.)

B. Prepare the consolidation worksheet entries to account for Piano Ltds interest in the joint venture, Mandolin Ltd. (Assume Piano Ltd does prepare consolidated financial statements.)

30%

Piano Ltd Mandolin Ltd