QUESTION 3 (42 marks for two parts)

Part A (36 marks)

On 1 July 2019, Sughan Ltd acquired 65% of the shares of Gooder Ltd for $371 575. At this date, the equity of Gooder Ltd consisted of share capital of $300 000 and retained earnings of $120 000. All the identifiable assets and liabilities of Gooder Ltd were recorded at amounts equal to fair value except for the following.

Carrying Fair

Amount Value

Inventories $ 15 000 $18 000

Plant (cost $380 000) $300 000 $320 000

The plant was considered to have a further 10-year life.

All the inventories were sold by 30 June 2020.

The tax rate is 30%. Sughan Ltd uses the partial goodwill method.

During the year ended 30 June 2020, Gooder Ltd recorded a profit of $30 000.

Required

Prepare the consolidation worksheet entries for the preparation of the consolidated financial statements of Sughan Ltd at 30 June 2020.

1. Acquisition analysis as at 1 July 2019 (8 marks)
2. Business combination valuation entries (11 marks)
3. Pre-acquisition entries for Sughan Ltd (7 marks)
4. Pre-acquisition entries for Non Controlling Interest (4 marks)
5. Entries for changes in equity from 1 July 2019 to 30 June 2020 (current period) for Sughan Ltd and Non Controlling Interest (6 marks)

(Australia country)