QUESTION 2

1. Celeste Ltd is a major Australian manufacturer of women's clothing. Celeste Ltd acquired on 1 July 2016 all the issued shares (cum div.) of Felipe Ltd, a competitor, for $330 000. At this date, the equity of Felipe Ltd was as follows:

• Share Capital$200,000
• General Reserve $20,000
• Retained Earnings $50,000

All the identifiable assets and liabilities of Felipe Ltd were recorded at amounts equal to their fair values except for the following:

• Plant (cost $220,000)Carrying amount $180,000Fair Value $186,000
• LandCarrying amount $190,000Fair Value$210,000
• InventoriesCarryingamount $20,000Fair Value$28,000

At 1 July 2016, Felipe Ltd had recorded a dividend payable of $10 000 that was paid in September 2016.

Felipe Ltd also had some unrecorded assets, in particular the brands relating to the clothing sold in the teenage market. Celeste Ltd valued these brands at $12 000 and assessed them to have an indefinite life. In the notes to its financial statements at 30 June 2016, Felipe Ltd disclosed a contingent liability relating to a guarantee it had made to one of its related companies. Celeste Ltd assessed the fair value of the guarantee payable as being $10 000.

The plant's expected remaining useful life was 5 years with benefits being expected evenly over that period. The plant was sold on 1 January 2019 for $187 000. The land was sold in February 2017 for $250 000. The inventory was sold by 30 June 2017.In August 2018, Felipe Ltd was required to pay $2500 in relation to the guarantee.

The tax rate is 30%.

Required

Prepare the consolidation worksheet entries (BCVR and pre-acquisition) for Celeste Lt group at30 June 2019 only