The following financial statements of Richard Ltd and its subsidiary William Ltd have been extracted from their financial records at the 30th of June 2022.

	Richard Ltd ($)	William Ltd ($)
Detailed reconciliation of opening and closing retained earnings
Sales revenue	1 725 000	1 450 000
Cost of goods sold	(1 160 000)	(595 000)
Gross profit	565 000	855 000
Dividend revenuefrom William Ltd	186 000
Management fee revenue	66 250
Profit on sale of plant	87 500
Expenses:
Administrative expenses	(77 000)	(96 750)
Depreciation	(61 250)	(142 000)
Management fee expense		(66 250)
Other expenses	(252 750)	(192 500)
Profit before tax	513 750	357 500
Tax expense	(153 750)	(105 500)
Profit for the year	360 000	252 000
Retained earningsthe 1st of July 2021	798 500	598 000
	1 158 500	850 000
Dividends paid	(343 500)	(232 500)
Retained earningsthe 30th of June 2022	815 000	617 500

Statement of financial position
Shareholders' equity:
Retained earnings	815 000	617 500
Share capital	875 000	500 000
Current liabilities:
Accounts payable	136 750	115 750
Tax payable	103 250	62 500
Non-current liabilities:
Loans	433 750	290 000
	2 363 750	1 585 750
Current assets:
Accounts Receivable	148 500	155 750
Inventory	230 000	72 500
Non-current assets:
Land and buildings	560 000	815 000
Plant at cost	749 625	889 500
Accumulated depreciation	(214 375)	(347 000)
Investment in William Ltd	890 000
	2 363 750	1 585 750

Additional information:

1. Richard Ltd had acquired its 80 per cent interest in William Ltd on the 1st of July 2010, that is 12

years earlier. At that date of acquisition, the capital and reserves of William Ltd were:

Share capital $500 000

Retained earnings $425 000

Total $925 000

At the date of acquisition, all assets were considered fairly valued.

1. The management of Richard Ltd measures any non-controlling interest at the proportionate share of William Ltd's identifiable net assets.

1. During the year, Richard Ltd made total sales to William Ltd of $162 500, while William Ltd sold $130 000 in inventory to Richard Ltd.

1. The opening inventory in Richard Ltd as at the 1st of July 2021 included inventory acquired from William Ltd of $105 000 that had cost William Ltd $87 500 to produce.

1. The closing inventory in Richard Ltd includes inventory acquired from William Ltd at $84 000. The cost to William Ltd is $70 000 to produce.

1. The closing inventory of William Ltd includes inventory acquired fromRichard Ltd at the cost of $30 000. The cost to Richard Ltd is $24 000 to produce.

1. The management of Richard Ltd believes that the goodwill acquired was impaired by $7 500 in the

current financial year. Previous impairments of goodwill amounted to $56 250.

1. On the 1st of July 2021, Richard Ltd sold an item of plant to William Ltd for $290 000 when its carrying value in Richard Ltd's accounts was $202 500 (cost of $337 500, accumulated depreciation of $135 000). This plant is assessed as having a remaining useful life of six years.

1. William Ltd paid $66 250 in management fees to Richard Ltd.

1. The tax rate is 30 per cent.

REQUIRED:

1. Calculate goodwill on acquisition. (5 marks)
2. Complete all consolidation journal entries, including non-controlling interest. (17.5 Marks)
3. Prepare consolidation worksheet. (10.5 Marks)
4. Prepare consolidated statement of profit and loss and other comprehensive income of Richard Ltd and its subsidiary for the year ended the 30th of June 2022. (5 marks)
5. Prepare the consolidated statement financial position of Richard Ltd and its subsidiaries as at the 30th of June 2022. (5 marks)
6. Prepare Richard Ltd and its controlled entity's Consolidated statement of changes in equity for the year ended the 30th of June 2022. (5 marks)
7. Prepare Richard Ltd Statement of changes in equity for the year ended 30th of June 2022. (5 marks)