Question
Wallaby Ltd purchased all the shares of Koala Ltd on 31 December 20X3. Koalas assets were recorded at fair value except for the following: Land:
Wallaby Ltd purchased all the shares of Koala Ltd on 31 December 20X3. Koalas assets were recorded at fair value except for the following:
Land: | Carrying amount | $46000 | Fair value | $70000 |
Inventory: | Carrying amount | $23000 | Fair value | $26000 |
Vehicle: | Carrying amount | $78 000 | Fair value | $60 000 |
Accounts receivable: | Carrying amount | $27 000 | Fair value | $29 000 |
Additional information for the above assets:
Koala uses the AASB 116 cost model to measure the land and vehicle but, for group/consolidation purposes, revaluation to fair value is the model applied.
Fair value of the land at 31 December 20X5 was $91,000.
Koalas inventory held at the control date was still in stock unitl 31 December 20X4. All of the inventory was sold to external parties in the year ended 31 December 20X5.
The vehicle had a remaining useful life of 6 years at the control date. The residual value is nil. The vehicle originally cost $90,000.
Required:
Prepare entries for the required consolidation data adjustments on 31 December 20X5, the year end. (8 marks)
Hint for adjustment related to inventory: you can show the single combined adjustment entry.
Reminder:
No marks will be awarded for workings/calculations.
Narrations are NOT required for journal entries.
Use the provided journal entry template to enter your answer.
The template should provide enough space. However, if you find the space is insufficient in the template or encounter a table formatting issue, write your journal entries below the template, and ensure clear labelling of DR or CR.
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