Subsidiary Ltd recorded the changes in equity during the year ended 30 June 20x3 as follows. Profit for the year(after tax) Retained earnings at 1 July 20X2 $21900 $36500 $58400 Dividend paid ($7300) Dividend declared ($4380) Transfer to general reserve* ($3650) ($15330) $43070 $730 Retained earnings at 30 June 20X3 Asset Revaluation Surplus at 30 June 20X2** Asset Revaluation Surplus at 30 June 20X3** * from post-acquisition equity $1460 **resulted from movement in fair value of financial assets REQUIRED: NB: Round all your answers to the nearest dollar amount. If you believe no journal entry is required, select NULL for the account name, NA for the Dr or Cr, and enter O for the amount. Do not leave the amount blank. Do not enter dollar ($) signs or commas (i.e. enter 10000 not $10,000). (a) Prepare the acquisition analysis at acquisition date; (b) Prepare the business combination valuation entries for the year ended at 30 June 20x3 in the consolidation worksheet; (c) Prepare the pre-acquisition entries for the year ended at 30 June 20x3 in the consolidation worksheet; (d) Prepare the journal entries to allocate the NCI share of equity at acquisition date for the year ended at 30 June 20x3 in the consolidation worksheet; (e) Prepare the journal entries to allocate the NCI share of changes in equity from 1 July 20X1 to 30 June 20X2 in the consolidation worksheet; (f) Prepare the journal entries to allocate the NCI share of changes in equity from 1 July 20X2 to 30 June 20x3 in the consolidation worksheet. (g) Prepare the journal entries to account for adjustments related to the intra-group dividend transactions for the year ended 30 June 20x3 in the consolidation worksheet. SOLUTIONS: (a) Acquisition analysis at 1 July 20X1 Net fair value of identifiable assets and liabilities of Subsidiary Ltd = $ Net consideration transferred $ NCI in Subsidiary Ltd $ Goodwill acquired II $ Fair value of the total shares in Subsidiary Ltd EA Goodwill of Subsidiary Ltd $ Control premium - Parent $ (b) Business combination valuation entries at 30 June 20X3 Dr Cr Cr (BCVR entries for Inventory value adjustment) Accumulated Depreciation Dr Plant BCVR Cr (BCVR entries for Plant value adjustment) Depreciation expense Dr Dr Cr - (BCVR entries for Plant depreciation expense adjustment) Subsidiary Ltd recorded the changes in equity during the year ended 30 June 20x3 as follows. Profit for the year(after tax) Retained earnings at 1 July 20X2 $21900 $36500 $58400 Dividend paid ($7300) Dividend declared ($4380) Transfer to general reserve* ($3650) ($15330) $43070 $730 Retained earnings at 30 June 20X3 Asset Revaluation Surplus at 30 June 20X2** Asset Revaluation Surplus at 30 June 20X3** * from post-acquisition equity $1460 **resulted from movement in fair value of financial assets REQUIRED: NB: Round all your answers to the nearest dollar amount. If you believe no journal entry is required, select NULL for the account name, NA for the Dr or Cr, and enter O for the amount. Do not leave the amount blank. Do not enter dollar ($) signs or commas (i.e. enter 10000 not $10,000). (a) Prepare the acquisition analysis at acquisition date; (b) Prepare the business combination valuation entries for the year ended at 30 June 20x3 in the consolidation worksheet; (c) Prepare the pre-acquisition entries for the year ended at 30 June 20x3 in the consolidation worksheet; (d) Prepare the journal entries to allocate the NCI share of equity at acquisition date for the year ended at 30 June 20x3 in the consolidation worksheet; (e) Prepare the journal entries to allocate the NCI share of changes in equity from 1 July 20X1 to 30 June 20X2 in the consolidation worksheet; (f) Prepare the journal entries to allocate the NCI share of changes in equity from 1 July 20X2 to 30 June 20x3 in the consolidation worksheet. (g) Prepare the journal entries to account for adjustments related to the intra-group dividend transactions for the year ended 30 June 20x3 in the consolidation worksheet. SOLUTIONS: (a) Acquisition analysis at 1 July 20X1 Net fair value of identifiable assets and liabilities of Subsidiary Ltd = $ Net consideration transferred $ NCI in Subsidiary Ltd $ Goodwill acquired II $ Fair value of the total shares in Subsidiary Ltd EA Goodwill of Subsidiary Ltd $ Control premium - Parent $ (b) Business combination valuation entries at 30 June 20X3 Dr Cr Cr (BCVR entries for Inventory value adjustment) Accumulated Depreciation Dr Plant BCVR Cr (BCVR entries for Plant value adjustment) Depreciation expense Dr Dr Cr - (BCVR entries for Plant depreciation expense adjustment)