prepare the consolidation entry for the year ended 30 June 2020.
Question 1: Consolidation Accounting Background information relevant to Question 1. Black Ltd paid $20000 to acquire 100% of the issued shares of White Ltd at 1 July 2018 when the subsidiary's equity consisted of issued capital of $10,000 and retained earnings of $5,000. At the acquisition date, all assets and liabilities of White Ltd were recorded at their fair values, except for the following: o - A piece of land with a carrying amount of $5,000 and a fair value of $6,000. 0 - An item of plant with a book value of $1,200 and a fair value of $2.000. Its cost to White was 1.600. The plant has a remaining useful life of 4 years. 0 - A contingent liability [it satised AASB 3 to be recognized on consolidation) with an estimated fair value of $500. This contingent liability had not been recognized by White Ltd at the date of acquisition. Additional information: o - The land was sold on 15 June 2020. o - The contingent liability was settled on 1 September 2020 for $300. 0 - Transaction 1: At 1 August 2013. Black sold inventory to White at a 25% mark-up. The inventory had originally cost Black $3000. The inventory was all sold by 30 June 2019. o - Transaction 2: At 1 September 2013, White sold inventory to Black at a 25% mark-up. The inventory had originally cost White $2,000. By 30 June 2019, Black held 30% of the inventory purchased from white. By 30 June 2020, Black still held 10% of the inventory purchased from White. The inventory was all sold by 30 June 2021. o - Assume 30% tax rate and periodic inventory system Required: Based on the information provided, prepare the consolidation adjustment journals for the year ended 30 June 2020 (Le. 2 years after the acquisition date). Provide narrations that include all relevant calculations. Hint: Rememberto systemacalty walk through all steps in the consolidation process. {NOTE For this question we suggest you use the table tool I l in the left-hand side of the text box below {under le '3