Question 3 (20 marks) Non-controlling interest On 1 July 2040, Carnarvon Ltd acquired 60% of the issued shares of Karratha Ltd for $2,330,000. At this date the equity of Karratha Ltd consisted of Share capital 800,000 Retained earnings 2,400,000 General reserve 400.000 The non-controlling interest (NCT) in Karratha Ltd was considered to have a fair value of $1,520,000 All the identifiable assets and liabilities of Kuranda Ltd were recorded at amounts equal to fair value except for: Original Carrying Fair Cost Amount value $ $ s 120,000 160,000 800,000 400,000 560,000 Inventory Plant Additional information: All inventory was sold by 30 June 2041. It was estimated that the Plant had a further life of ten (10) years, and was depreciated on a straight-line basis Adjustments for differences between carrying amounts and fair values at acquisition date are made on consolidation Carnarvon Ltd uses the full goodwill method Karratha Ltd made a profit of $480,000 in the year ended 30 June 2041 The tax rate is 30% Required: (a) Provide a table to show the acquisition analysis of Karratha at 1 July 2040; clearly show any supporting calculations. (4 marks) (b) Prepare the business combination valuation reserve (BCVR) entries for the consolidation worksheet for the Carnarvon Ltd Group for the financial year ended at 30 June 2041. (7 marks) C) Prepare the pre-acquisition entry or entries for the consolidation worksheet for the Carnarvon Ltd Group for the financial year ended at 30 June 2041. (4 marks) (d) Prepare the NCI worksheet entry or entries for the consolidation worksheet for the Carnarvon Group for the financial year ended at 30 June 2041 (5 marks) Question 3 (20 marks) Non-controlling interest On 1 July 2040, Carnarvon Ltd acquired 60% of the issued shares of Karratha Ltd for $2,330,000. At this date the equity of Karratha Ltd consisted of Share capital 800,000 Retained earnings 2,400,000 General reserve 400.000 The non-controlling interest (NCT) in Karratha Ltd was considered to have a fair value of $1,520,000 All the identifiable assets and liabilities of Kuranda Ltd were recorded at amounts equal to fair value except for: Original Carrying Fair Cost Amount value $ $ s 120,000 160,000 800,000 400,000 560,000 Inventory Plant Additional information: All inventory was sold by 30 June 2041. It was estimated that the Plant had a further life of ten (10) years, and was depreciated on a straight-line basis Adjustments for differences between carrying amounts and fair values at acquisition date are made on consolidation Carnarvon Ltd uses the full goodwill method Karratha Ltd made a profit of $480,000 in the year ended 30 June 2041 The tax rate is 30% Required: (a) Provide a table to show the acquisition analysis of Karratha at 1 July 2040; clearly show any supporting calculations. (4 marks) (b) Prepare the business combination valuation reserve (BCVR) entries for the consolidation worksheet for the Carnarvon Ltd Group for the financial year ended at 30 June 2041. (7 marks) C) Prepare the pre-acquisition entry or entries for the consolidation worksheet for the Carnarvon Ltd Group for the financial year ended at 30 June 2041. (4 marks) (d) Prepare the NCI worksheet entry or entries for the consolidation worksheet for the Carnarvon Group for the financial year ended at 30 June 2041