Rule Ltd acquired all the issued capital of Book Ltd on 1 July 2020 for $1,500,000. At that date the shareholders' equity of Book Ltd was:

Share Capital $1,100,000

Retained Earnings $300,000

Additional information for the year ended 30 June 2021:

Inter-company sales:

Rule Ltd to Book Ltd $11,000

Book Ltd to Rule Ltd $19,000

Unrealised profits in closing inventory as at 30 June 2021 is $2,400 for goods sold by Book Ltd to Rule Ltd and $1,200 for goods sold by Rule Ltd to Book Ltd.

Unrealised profit in opening inventory for goods sold by Rule Ltd to Book Ltd as at 1 July 2020 is $2,100 and for goods sold by Book to Rule is $1,400.

Rule Ltd employees provide legal advice to Book Ltd. For these services, Book Ltd pays an annual fee of $8,000 per annum.

The final dividend of $16,500, declared as at 30 June 2020, was paid by Book Ltd in October 2020.

An interim dividend of $14,000 was paid on 31 January and a final dividend was declared $20,000 at 30 June, 2021.

On 30 June 2021, Rule Ltd purchased a motor vehicle from Book Ltd for $15,000. Book Ltd made profit on this sale of $3,500.

Book Ltd raised funds from Rule Ltd by borrowing $100,000 at an interest rate of 10% per annum. The annual interest charge was paid by Book Ltd on 30 June 2021.

The directors review the balance of goodwill each year. They agree that for the year ended 30 June 2021, goodwill is to be unpaired by $20,000.

Condolidations Worksheet 30 June 2021 Eliminations Rule Ltd Book Ltd Or Cr Consolidated Accounts Sales 1,485,000 825,000 80,000 1,280,000 Less Cost of Sales Inventory 01/07/2020 120,000 52,000 3,500 168,500 Purchases 625,000 313,000 80,000 908,000 745,000 365,000 1,076,500 Inventory 30/06/2021 115,000 49,000 3,600 160,400 Cost of Goods Sold 630,000 316,000 916,100 Gross Profit 855,000 509,000 1,363,900 Legal fees received 8,000 3,000 Gain on sale of plant 3,500 8,500 Dividends received 30,500 30,500 Interest received from Book Ltd 10,000 10,000 903,500 512,500 1,363,900 Less: Expenses - selling expense 80,000 35,500 115,500 - Admin expenses 291,500 814,000 20,000 625,500 Financial expenses 52,000 8,000 18,000 42,000 123,500 357,500 783,000 Operating profit before tax 480,000 155,000 580,900 Less tax expense 144,00 46,500 190,500 Profit after tax 336,000 108,500 390,400 Retained earnings 01/07/2020 588,000 421,500 303,500 16,500 722,500 Available for appropriation 924,000 630,000 1,112,900 Appropriations Interim dividend paid 80,000 14,000 14,000 80,000 Final dividend declared 140,000 20,000 20,000 140,000 Total appropriations 220,000 34,000 220,000 Retained earnings 30/06/2021 704,000 496,000 892,900 Share capital 2,000,000 1,100,000 1,100,000 2,000,000 Loan from Rule Ltd 100,000 100,000 Accounts payable 72,000 36,000 108,000 Dividends payable 140,000 20,000 20,000 140,000 Taxation Payable 94,000 25,000 119,000 3,010,000 1,777,000 3,259,900 Property, plant & equipment (net) 732,000 300,000 3,500 1,628,500 Shares in Book Ltd 1,500,000 1,500,000 Loan to Book Ltd 100,000 100,000 Other non-current assets 835,000 650,000 185,000 Inventory 115,000 9,000 3,600 160,400 Other current assets 228,000 178,000 406,000 Goodwill on consolidation 100,000 20,000 80,000 3,010,000 1,777,000 1,729,100 1,729,100 3,259,900