Question 1: Consolidations

On 1 July 2021 Buzz Ltd acquired the shares of Debra Ltd for $29100. On the date of acquisition, the balance sheets of Buzz Ltd and Debra Ltd showed the following respectively:

The Company tax rate is 30%.

Required:

1. Complete the acquisition analysis as at the date of acquisition.

2. Prepare the adjusting journal entries for the consolidation worksheet at 1 July 2021. Narrations are required.

3. Complete the consolidation worksheet as at 1 July 2021on the next page. (Use the following format

	Buzz Ltd	Debra Ltd		Adjustments			Group
Account				Dr	Cr

Buzz Ltd Balance Sheet as at 1 July 20214 Share capital $600002 Retained earnings $91002 1 1 1 Cash at bank Equipment Investment in Debra Ltda $100002 $300002 $291002 , Debra Ltd Balance Sheet as at 1 July 20214 Share capitale $30000 Retained earnings (Losses) ($5000) 11 Cash at bank $5000 Inventories (fair value is $6000) $20004 Patent (fair value is $17000) $180002