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Please expert solve this question with explanation..Thank you so much in advance On 1 July 2021 Garden Ltd acquires 70 per cent of the equity

Please expert solve this question with explanation..Thank you so much in advance

On 1 July 2021 Garden Ltd acquires 70 per cent of the equity capital of Richards Ltd at a cost of $4 million. At the date of acquisition all assets of Richards Ltd are fairly stated, and the total shareholders funds of Richards Ltd are $4.4 million, consisting of:

Share capital $3 000 000
Retained earnings $1 400 000
$4 400 000

As at 30 June 2023 (two years after the date of acquisition) the financial statements of the two companies are as follows:

Garden Ltd ($000 Richards Ltd ($000
Detailed reconciliation of opening and closing retained earnings

Sales revenue

800 200

Cost of goods sold

(200) (80)

Other expenses

(120) (60)

Other revenue

310 85

Profit

790 145

Tax

(170) (35)

Profit after tax

620 110

Retained earnings1 July 2022

2 000 1 600

2 620 1 710

Dividends paid

(400) (80)

Retained earnings30 June 2023

2 220 1 630

Statement of financial position

Shareholders equity

Retained earnings

2 220 1 630

Share capital

8 000 3 000

Current liabilities

Accounts payable

120 80

Non-current liabilities

Loans

1200 500

11 540 5 210

Current assets

Cash

300 50

Accounts receivable

500 350

Inventory

1 000 600

Non-current assets

Land

2 800 2 210

Plant

2 940 2 000

Investment in Richards Ltd

4 000 _
11 540 5 210

Additional information

A. The management of Garden Ltd measures any non-controlling interest in Richards Ltd at fair value.

B. During the 2023 financial year, Richards Ltd sells $45 000 of inventory to Garden Ltd. At year end, Garden Ltd has sold all of this inventory.

The tax rate is 35 per cent.

REQUIRED

1. Calculate Goodwill on acquisition date.

2. Prepare necessary consolidation journal entries for Garden Ltd as at 30 June 2023.

3. Post the journal entries to the consolidation worksheet of Garden Ltd as at 30 June 2023.

4. Prepare the consolidated statement of financial position of Garden Ltd as at 30 June 2023.

5. Prepare consolidated statement of profit or loss and other comprehensive income of Garden Ltd for financial year ended 30 June 2023.

6. Prepare consolidated statement of changes in equity of Peterson Ltd as at 30 June 2023.

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