Tim Ltd acquired all the issued capital of Tam Ltd on 1 July 2012 for $3,020,000. At that date the shareholders equity of Tam Ltd was:

	$
Share Capital	2,200,000
Retained Earnings	640,000

Additional information for the year ended 30 June 2014:

(1) Intercompany sales:

(a) Tim Ltd to Tam Ltd $42,000

(b) Tam Ltd to Tim Ltd $36,000

(2) Unrealised profits in closing inventory as at 30 June 2014 is $2,400 for goods sold by Tam Ltd to Tim Ltd and $4,800 for goods sold by Tim Ltd to Tam Ltd.

(3) Unrealised profit in opening inventory for goods sold by Tim Ltd to Tam Ltd as at 1 July 2013 is $2,800 and for goods sold by Tam Ltd to Tim Ltd is $4,200.

(4) Tim Ltd employees provide administration support to Tam Ltd. For these services, Tam Ltd pays an annual fee of $20,000 per annum.

(5) The final dividend of $33,000 declared as at 30 June 2013, was paid by Tam

Ltd in October 2013. An interim dividend was paid in January $28,000. A

final dividend was declared at 30 June, 2014 $40,000.

(6) On 30 June 2014, Tim Ltd purchased a motor vehicle from Tam Ltd for

$30,000. Tam Ltd made profit on this sale of $7,000.

(7) Tam Ltd raised funds from Tim Ltd by issuing $200,000, 8% Debentures on

1 July 2013. The annual interest charge was paid by Tam Ltd 30 June 2014.

(8) The directors review the balance of goodwill each year. They agree that:

(a) For the year ended 30 June 2013, goodwill was impaired by $10,000.

(b) For the year ended 30 June 2014, goodwill is to be impaired by

$40,000. Trial balance of Tim Ltd and Tam Ltd is attached for your information

Required:

Prepare the appropriate consolidated journal entries for 30 June 2014 to record the following transactions in the worksheet provided:

Trial Balance for Tim Ltd & Tam Ltd: 30 June 2014

	Tim Ltd	Tam Ltd	Eliminations		Consolidation
Sales	2,970,000	1,650,000
Less: Cost of Sales
Inventory 01/07/2013	240,000	104,000
Purchases	1,250,000	626,000
	1,490,000	730,000
Inventory 30/06/2014	230,000	98,000
Cost of Goods Sold	1,260,000	632,000
Gross Profit	1,710,000	1,018,000
Administration support fees	20,000	0
Gain on Sale of Plant	0	7,000
Dividends Received	61,000	0
Interest Received on Debentures	16,000	0
	1,807,000	1,025,000
Less: Expenses - Selling Exp.	160,000	71,000
- Admin Exp. - Financial Exp.	583,000 104,000 847,000	628,000 16,000 715,000
Operating Profit before Tax	960,000	310,000
Less: Tax expense	288,000	93,000
Profit after Tax	672,000	217,000
Retained Earnings 01/07/2013	1,176,000	843,000
Available for Appropriation	1,848,000	1,060,000
Appropriations
Interim dividend paid	160,000	28,000
Final dividend declared	280,000	40,000
Total Appropriations	440,000	68,000
Retained Earnings 30/06/2014	1,408,000	992,000
Share Capital	4,000,000	2,200,000
8% Debentures	0	200,000
Accounts Payable	144,000	72,000
Final Dividends Payable	280,000	40,000
Taxation Payable	188,000	50,000
	6,020,000	3,554,000
Property, Plant & Equip (net)	1,464,000	1,800,000
Shares in Tam Ltd	3,020,000	0
8% Debentures	200,000	0
Other Non-Current Assets	650,000	1,300,000
Inventory	230,000	98,000
Other Current Assets	456,000	356,000
Goodwill on Consolidation
	6,020,000	3,554,000

Please use the following format

General Journal

Consolidated worksheet for Tim Ltd & Tam Ltd as at 30 June 2014

	Tim Ltd	Tam Ltd	Eliminations		Consolidation
Sales	2,970,000	1,650,000
Less: Cost of Sales
Inventory 01/07/2013	240,000	104,000
Purchases	1,250,000	626,000
	1,490,000	730,000
Inventory 30/06/2014	230,000	98,000
Cost of Goods Sold	1,260,000	632,000
Gross Profit	1,710,000	1,018,000
Administration support fees	20,000	0
Gain on Sale of Plant	0	7,000
Dividends Received	61,000	0
Interest Received from Tam ltd	16,000	0
	1,807,000	1,025,000
Less: Expenses - Selling Exp.	160,000	71,000
- Admin Exp.	583,000	628,000
- Financial Exp.	104,000	16,000
	847,000	715,000
Operating Profit before Tax	960,000	310,000
Less: Tax expense	288,000	93,000
Profit after Tax	672,000	217,000
Retained Earnings 01/07/2013	1,176,000	843,000
Available for Appropriation	1,848,000	1,060,000
Appropriations
Interim Dividend paid	160,000	28,000
Final Dividend declared	280,000	40,000
Total Appropriations	440,000	68,000
Retained Earnings 30/06/2014	1,408,000	992,000
Share Capital	4,000,000	2,200,000
8% Debentures	0	200,000
Accounts Payable	144,000	72,000
Final Dividends Payable	280,000	40,000
Taxation Payable	188,000	50,000
	6,020,000	3,554,000
Property, Plant & Equip (net)	1,464,000	1,800,000
Shares in Tam Ltd	3,020,000	0
8% Debentures in Tam	200,000	0
Other Non-Current Assets	650,000	1,300,000
Inventory	230,000	98,000
Other Current Assets	456,000	356,000
Goodwill on Consolidation
	6,020,000	3,554,000