Q1. Small Ltd bought a 30% interest in a joint venture, Fry Ltd, for $50 000, on 1 July 2017. The equity of Fry Ltd at the acquisition date was:

All the identifiable assets and liabilities of Fry Ltd were recorded at amounts equal to their fair values. Profits and dividends for the years ended 30 June 2018 to 2020 were as follows:

REQUIRED

(a) Prepare journal entries in the records of Small Ltd for each of the years ended 30 June 2018 to 2020 in relation to its investment in Fry Ltd. (Assume Small Ltd does not prepare consolidated financial statements.)

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

(16 marks)

Small Ltd bought a 30% interest in a joint venture, Fry Ltd. for $50 000 on 1 July 2017, The equity of Fry Ltd at the acquisition date was: Q1. Share capital Retained earnings 30000 120000 All the identifiable assets and liabilities of Fry Ltd were recorded Profits and dividends for the years ended 30 June 2018 to 2020 were as follows: at amounts equal to their fair values. Profit before tax Income tax expense neta Dividends paid 2018 2019 2020 $80000 70000 60000 $30000 25000 20000 $80000 15000 10000 818.0 ere a REQUIRED (a) Prepare jounal entries in the records of Small Ltd for each of the years ended 30 June 2018 to 2020 in relation to its investment in Fry Ltd. (Assume Small Ltd does not prepare consolidated financial statements.) (b) Prepare the consolidation worksheet entries to account for Small Ltd's interest in the joint venture, (16 marks) Fry Ltd. (Assume Small Ltd does prepare consolidated financial statements.)