Rule Ltd acquired all the issued capital of Book Ltd on 1 July 2019 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.

 

Required :  Please complete  the Consolidation worksheet provided in Microsoft Excel below ;

 

Condolidations Worksheet 30 June 2021
	Rule Ltd	Book Ltd	Eliminations		Consolidated Accounts
			Dr	Cr
Sales	1,485,000	825,000
Less Cost of Sales
Inventory 01/07/2020	120,000	52,000
Purchases	625,000	313,000
	745,000	365,000			-
Inventory 30/06/2021	115,000	49,000
Cost of Goods Sold	630,000	316,000			-
Gross Profit	855,000	509,000			-
Legal fees received	8,000
Gain on sale of plant		3,500
Dividends received	30,500
Interest received from Book Ltd	10,000
	903,500	512,500			-
Less: Expenses - selling expenses	80,000	35,500
- Admin expenses	291,500	314,000
- Financial expenses	52,000	8,000
	423,500	357,500			-
Operating profit before tax	480,000	155,000			-
Less tax expense	144,000	46,500
Profit after tax	336,000	108,500			-
Retained earnings 01/07/2020	588,000	421,500
Available for appropriation	924,000	530,000			-
Appropriations
Interim dividend paid	80,000	14,000
Final dividend declared	140,000	20,000
Total appropriations	220,000	34,000			-
Retained earnings 30/06/2021	704,000	496,000			-
Share capital	2,000,000	1,100,000
Loan from Rule Ltd		100,000
Accounts payable	72,000	36,000
Dividends payable	140,000	20,000
Taxation Payable	94,000	25,000
	3,010,000	1,777,000			-
Property, plant & equipment (net)	732,000	900,000
Shares in Book Ltd	1,500,000
Loan to Book Ltd	100,000
Other non-current assets	335,000	650,000
Inventory	115,000	49,000
Other current assets	228,000	178,000
Goodwill on consolidation
	3,010,000	1,777,000	-	-	-