Question 3 5 Marks

On 30 June 2021, ABC Ltd acquired 100 of the issued capital of XYZ Ltd by $2,000,000. At that date, the statement of financial position of XYZ Ltd reported the share capital and retained earnings of:

$1,200,000 and retained earnings $560,000.

Share capital $1,200,000

Retained earnings $560,000

Total Share capital and retained earnings $1,760,000

At the date of acquisition, statement of financial position of ABC Ltd and XYZ Ltd were as follows:

	ABC Ltd ($)	XYZ Ltd ($)
Assets
Land	480,000	600,000
Building	2,480,000	1,920,000
Accumulated Depreciation -buildings	(1,520,000)	(680,000)
Investment in XYZ Ltd	2,000,000
Inventories	368,000	300,000
Cash	60,000	20,000
Total Assets	3,868,000	2,160,000
Liabilities
Provisions	120,000	240,000
Payables	108,000	136,000
Deferred tax liabilities	40,000	24,000
Total liabilities	268,000	400,000
Net Assets	3,600,000	1,760,000
Shareholders equity
Share capital	2,200,000	1,200,000
Retained earnings	1,400,000	560,000
Total equity	3,600,000	1,760,000

Additional Information:

At the date of acquisition, all of the assets acquired and the liabilities assumed were valued at fair value.

Required:

1. Prepare the consolidated journal entries to consolidate ABC Ltd and XYZ Ltd at 30 June 2021. 1 Mark
2. Complete the consolidation worksheet for ABC Ltd and its controlled entity XYZ Ltd for period ending 30 June 2021 by using the excel provided in the next page.