Q3. The following information has been extracted from the financial statements of Blake Ltd and its subsidiary Seven Lid at 30 June 2019. Blake Ltd (5) Seven Ltd (5) Reconciliation of opening and closing retained earnings Sales revenue 593,400 498,800 Cost of goods sold (399,040) (204.680) Gross profit 194,360 294, 120 Dividends revenue from Seven Ltd 63,984 Management fee revenue 22,790 Profit on sale of plant 30, 100 Expenses Administrative expenses (26,488) (33,282) Depreciation (21,070) (48,848) Management fee expense (22,790) Other expenses (86,946) (66,220) Profit before tax 176,730 122,980 Tax expense (52,890) (36,292) Profit for the year 123,840 86,688 Retained earnings-30 June 2017 274.684 205,712 398,524 292,400 Dividends paid (118,164) (79.980) Retained earnings-30 June 2018 280,360 212,420 Statements of financial position Shareholders' equity Retained earnings 280,360 212,420 Share capital 301,000 172,000 Current liabilities Accounts payable 47,042 39,818 Tax payable 35,518 21,500 Non-current liabilities Loans 149.210 99,760 813,130 545,498 Current assets Accounts receivable 51,084 53,578 Inventory 79,120 24,940 Non-current assets Land and buildings 192,640 280,360 Plant -at cost 257,871 305,988 Accumulated depreciation (73,745) (119,368) Investment in Seven Ltd 306.160 813.130 545,498 Other information 1. Blake Lid acquired its 80 per cent interest in Seven Lid on 1 July 2009. At that date the capital and reserves of Seven Lid were: Share capital $172,000 Retained earnings $146,200 $318,200 At the date of acquisition all assets were considered to be fairly valued. WN The management of Blake Ltd use the partial goodwill method. During the year Blake Ltd made total sales to Seven Lid of $55,900, while Seven Ltd sold $44,720 in inventory to Blake Ltd. 4. The opening inventory in Blake Lid as at 1 July 2015 included inventory acquired from Seven Lid for $36, 120 that cost Seven Lid $30, 100 to produce. 5. The closing inventory in Blake Ltd includes inventory acquired from Seven Ltd at a cost of $28,896. This cost Seven Lid $24,080 to produce. The College of Business and Law ACT305 Corporate Accounting