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Consolidation Worksheet Format: Eliminations and adjustments Cr Ltd Runner Ltd Dr Consolidated Bla statement ($000) ($000) ($000) ($000) ($000) Detailed reconciliation of opening and closing retained earnings Sales revenue 1 380 1 160 Cost of goods sold (928) (476) Gross profit 452 68 Other revenue Dividends received from Runner Ltd 186 Management fee revenue 53 Gain on sale of plant 70 Expenses Administrative expenses (98.8) (77.4) Depreciation (49) (113.6) Management fee expense (53) Other expenses (202.2) (154) Profit before tax 286 Tax expense 123 84.4926.8 680 Dividends paid (274.8) (186) Retained earnings- -30 June 2018 652 494 Eliminations and adjustments Blade Ltd Runner Ltd Dr Cr Consolidated statement ($000) ($000) $000) ($000) ($000) Statement of financial position Shareholders' equity Retained earnings 652 494 Share capital 700 400 Current liabilities Accounts payable 109.4 92.6 Tax payable 82.6 50 Non-current liabilities Loans 232 1 891 1 268.6 Current assets Accounts receivable 118.8 124.6 Inventory 184 58 Non-current assets Deferred tax asset Land and buildings 448 652 4Plant at cost Accumulated depreciation (171 , 5 ) (277 .6) Investment in Runner Led Goodwill Accumulated amortisation 1 268. 6Land and buildins 448 652 Plantat cost Accumulated d reciation 277.6 Investment in Runner Ltd . 1 891 I 1 268.6 Other inrman'on - Blade Ltd acquired its 100 per cent interest in Runner Ltd for $716 000 (cum div) on 1 July 2014 four years earlier. Dividend declared and paid by Runner Ltd was $4 000 on 31 July 2014. On 1 July 2014, the canital and reserves ofRunner Ltd were: Share caital $400 000 Retained eamin_s $250 000 $650 000 At the date of acquisition all assets were considered to be fairly valued. - The opening inventory in Blade Ltd as at 1 July 2017 included inventory acquired from Runner Ltd for $84 000 that had cost Runner Ltd $70 000 to produce. - During the year ended 30 June 2018, Blade Ltd made total sales to Runner Ltd of $130 000, while Runner Ltd sold $104 000 in inventory to Blade Ltd. - The closing inventory in Blade Ltd includes inventory acquired from Runner Ltd at a cost of $67 200. This cost Runner Ltd $52 000 to produce. - The closing inventory of Runner Ltd includes inventory acquired from Blade Ltd at a cost of $24 000. This cost Blade Ltd $19 200 to produce. - The management of Blade Ltd believe that goodwill acquired was impaired by $5 000 in the current nancial year. Previous impairments of goodwill amounted to $10 000. - On 1 July 2017 Blade Ltd sold an item of plant to Runner Ltd for $100 000 when its carrying value in Blade Ltd's accounts was $80 000 (cost $120 000, accumulated depreciation $40 000). This plant is assessed as having a remaining useful life of six years from the date of sale. - Runner Ltd paid $20 000 in management fees to Blade Ltd. - The tax rate is 30 per cent. REQUIRED 21) Prepare the consolidation worksheet entries for Blade group at 30 June 2018. 20 marks b). Complete the attached consolidation worksheet. 10 marks Question 3 The following financial records at 30 June 2018 are extracted from Blade I de Itd and its subsidiary Runner Led Blade Led Riome (3000) (5000 ) Detailed reconciliation of opening and closing retained earnings Sales revenue Cost of goods sol Gross profit Dividends received from Runner Led Management fee revenue Gain on sale of plant Expenses Administrative expenses Depreciation ( 1 13 .6 ) Management fee expense Other expenses 202 2 ) ofit before Profit before tax Tax expense Profit for the year Retained earnings - 30 June 2017 Dividends paid 274.8 ) Retained earnings - 30 June 2018 Blade Lid Runner Lid ( 3000) (8000) Statement of financial position Shareholders equip Retained earnings Share capital Current liabilities Accounts payable Tax payable Non-current liabilities 1 268.6 Current assets Accounts receivable Inventor Non - current assets