Prepare consolidation worksheet journal entries necessary to consolidate Guchee Ltd and its subsidiary for the financial year ended 31 December 2021, in accordance with AASB 3/IFRS 3 Business Combinations and AASB 10/IFRS 10 Consolidated Financial Statements: (i) Fair value adjustments upon consolidation (RSROC entries) (ii) Pre-acquisition entries (iii) Elimination of intragroup transactions (iv) NCI adjustments

Guchee Ltd acquired 70% of the issued shares (ex div) of Zhanell Ltd on 1 January 2013 for $10,000,000. On that day, all net assets of Zhanell Ltd were stated at fair value except for patents, which had a fair value of $1,000,000 above its book value, and a heavy equipment. The equipment has a cost of $650,000, accumulated depreciation of $100,000 and the fair value was $770,000. The depreciation rate of the equipment was 20% per annum with no residual value. The following information are extracted from the books of Zhanell Ltd: 1 Jan 2013 $ 5,000,000 2,100,000 2,300,000 Share capital General reserve Retained earnings Other components of equity Dividends payable Goodwill 31 Dec 2021 $ 5,000,000 3,000,000 5,460,000 1,000,000 750,000 50,000 50,000 The accounts of Guchee Ltd and Zhanell Ltd for the financial year ended 31 December 2021 revealed the following information: Guchee Ltd Zhanell Ltd $ $ Profit after income tax 6,000,000 2,900,000 Retained earnings as at 1 January 2021 8,200,000 3,560,000 Dividends paid 500,000 250,000 Dividends declared 1,500,000 750,000 Additional Information: (i) The tax rate is 24%. Guchee Ltd uses the full goodwill method to prepare its consolidated financial statements. Fair value of NCI is estimated to be $3.5 million. The constitution of the Group allows directors to declare dividends at any time and this is not subject to any approval, authorization, or discretion. (ii) (iii) On 1 August 2018, Zhanell Ltd sold some inventory to Guchee Ltd for $800,000, recording a profit before tax of $100,000. Guchee Ltd re-sold half of the inventory to external customers in 2018 for $50,000. Another one-quarter was re-sold to an overseas customer in 2020 for $30,000. The remaining one-quarter of the original inventory was still on hand on 31 December 2021. (iv) Since April 2018, Guchee Ltd has been providing consultancy services to Zhanell Ltd for an invoiced amount of $5,000 per month. As at 31 December 2021, all amounts owing to Guchee Ltd have been paid by Zhanell Ltd except for the invoices of November and December 2021. Additional Information (contd.): (v) On 1 June 2019, Guchee Ltd acquired 2000 15% debentures from Zhanell Ltd at $100 per debenture. Interest on debentures was to be paid every 6 months on 31 March and 30 September. Any accrued interest receivable or payable at the end of the financial year have been accounted for in the accounts of both companies. (vi) On 1 September 2018, Zhanell Ltd sold a Plant to Guchee Ltd for $350,000. This item had previously cost Zhanell Ltd $420,000. Plant of both companies was depreciated on a straight-line basis of 10% per annum. (vii) Goodwill is impairment tested on an annual basis. An impairment of 20% on the amount of goodwill acquired was accounted for in the financial year ended 31 December 2020. The directors of Guchee Ltd have decided that a further 20% of the goodwill acquired has been impaired in the financial year ended 31 December 2021. Investment in Joint Venture (viii) Guchee Ltd purchased 35% of the ordinary shares of Luvee Ltd and agreed to issue its own Al' ordinary shares of 50,000 shares worth $880,000 to acquire this investment. A joint venture agreement was later signed on 1 September 2021 pertaining to this acquisition and Guchee Ltd appointed two directors to the five- seat board of directors of Luvee Ltd. The acquisition analysis of the investment in Luvee Ltd showed that there was a gain on bargain purchase made of $152,000. (ix) On 5 December 2021, Luvee Ltd declared and paid an interim dividend of $55,000 and Luvee Ltd earned a profit after income tax expense of $196,000 for its financial year ended 31 December 2021