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Question 8 (7 marks) On 1 July 2005 Oliver Ltd acquired 25% of the equity in Hardy Ltd for a cash consideration of $80,000. At this date the equity in Hardy Ltd consisted of: Capital 165 000 Retained earnings 60 000 At the date of acquisition, land and buildings have carrying amounts in the books of Hardy Ltd of $200,000 and $400,000 respectively. The market value of the buildings was $460,000. The buildings have an expected useful life of 20 years from this date. For the year ending 30 June 2006 Hardy Ltd reported an after-tax profit of $50,000. During the year it declared and paid dividends of $20,000. At 30 June 2006 there were unrealised profits of $10,000 arising from inventory transfers between Oliver Ltd and Hardy Ltd. Hardy Ltd also revalued its land to $250,000 on 30 June 2006. For the year ending 30 June 2007 Hardy Ltd reported an after-tax profit of $100,000. During the year it declared and paid dividends of $50,000. Required (i) For the 2006 financial year, show the general journal entries to record the above events in the books of Oliver Ltd under the equity method of accounting. (3 marks)(i) For the 2006 financial year, show the general journal entries to record the above events in the books of Oliver Ltd under the equity method of accounting. (3 marks) Account Debit Credit(ii) Show the consolidation journal entries on 30 June2007 assuming Oliver Ltd was a parent of other entities prior to the acquisition of Hardy Ltd. (3 marks) Debit Account Credit(ii) Calculate the carrying amount of the Investment in Hardy Ltd on 30 June 2007 under the equity method of accounting. (1 mark)