Q9 Investments in Associates 10 Points The following information is relevant to questions 9.1 and 9.2. On 1 July 2018 Bandit Ltd acquired 30% of the shares in Chilli Ltd at a cost of $130,000. At that time the equity in Chilli Ltd consisted of Share capital: $250,000 Retained profits: $90,000 Asset revaluation surplus: $9,000 This equity at the acquisition date reflected the fair value of net assets in Chilli Ltd with the exception of some depreciable non-current assets with a fair value of $50,000 (before tax) greater than carrying amount. These depreciable assets are expected to have a further 10-year life. The results of Chilli Ltd for the year ended 30 June 2020 is as follows: Profit before tax Income tax Profit after tax Retained profits 1 July 2019 Dividends paid Retained profits 30 June 2020 30 June 2020 $150,000 ($35,000) $115,000 $140,000 ($15,000) $240,000 Additional information: For the year ended 30 June 2019, Chilli Ltd paid a dividend of $12,000 and transferred $5,000 to general reserve At 30 June 2020, Bandit Ltd had inventory costing $30,000 (2019: $20,000) on hand which had been purchased from Chilli Ltd. A profit before tax of $3,000 (2019: $2,000) had been recorded on the sale. The equity of Chilli Ltd at 30 June 2020 was: Share capital: $250,000 Retained profits: $240,000 Asset revaluation surplus: $15,000 General reserve: $5,000 Note that as at the date of acquisition of Chilli Ltd, Bandit Ltd was (and still is) a controlling entity Q9.1 3 Points Calculate Bandit's share of Chilli's profit for the year ended 30 June 2020 in accordance with AASB 128 Investments in Associates and Joint Ventures. Show your working. Enter your answer here Q9.2 3 Points List all the consolidation entries that would be required by Bandit Ltd for the year ended 30 June 2020 to account for the investment in Chilli in the consolidated financial statements. Please select file(s) Select file(s) Q9.3 4 Points Explain two similarities and two differences between equity accounting and accounting for consolidation (assume the share ownership is below 100% for consolidation). Enter your answer here