Y Ltd acquired equity in Z Ltd on 1 April 2008. At that date, the identifiable net assets were considered to be fairly valued and the equity of Z Ltd comprised:

Share capital	$700 000
Asset revaluation surplus	45 000
Retained earnings	278 000
	$1 023 000

Y Ltd has requested your help in the preparation of their consolidated financial statements for the financial year ended 31 March 2018 and has provided you with the following information:

• During March 2017 Z Ltd made sales to Y Ltd of $8 000 and recognised a profit of $4 200. Y Ltd sold this purchase of inventory to Robert Ltd during May 2017.

• During March 2018 Z Ltd made sales to Y Ltd of $ 8 500. The inventory sold has cost Z Ltd $5 400. At 31 March 2018, the inventory Y Ltd had on hand included this purchase from Z Ltd.

• Y Ltd borrowed $60 000 from Z Ltd during November 2016. Interest of $1 200 is outstanding on this loan as at 31 March 2018. The total interest for the financial year ended 31 March 2018 was $1 500.

• In 2010 the total goodwill of Z Ltd was considered by the directors to be impaired by $ 15 000 and impaired again in 2015 by $ 72 600. The directors of Y Ltd believe that the total goodwill has been further impaired by $63 000 during this financial year ended 31 March 2018.

• During March 2017 Y Ltd made sales to Z Ltd of $3 200 and recognised a profit of $1 600. Z Ltd sold this inventory to Alex Ltd on 31 March 2017.

• During March 2018 Y Ltd made sales to Z Ltd of $4 860. The inventory sold has cost Y Ltd $2 000. The inventory of Z Ltd at 31 March 2018 included this purchase.

• At 31 March 2018 Z Ltd declared a final dividend of $120 000 and Y Ltd declared a final dividend of $75 000. Both these dividends were paid during April 2018.

• Y Ltd rents a small office to Z Ltd at a cost of $26 000 per annum. At 31 March 2018, Z Ltd still owed Y Ltd $5 000 of rental for the year ended 31 March 2018.

Assume Y Ltd acquired 100% of the equity in Z Ltd for $1 500 000 on

1 April 2008. Complete the consolidation worksheet, in the answer booklet, for Y Ltd for the financial year ended 31 March 2018 in accordance with NZ IFRS 10 Consolidated Financial Statements and NZ IFRS 3 Business Combinations.

Consolidation Worksheet for Y Ltd for the financial year ended 31 March 2018 Y Ltd Z Ltd Notional Journal Entries Group Income statement/dividend items: $ S S Dr $ Cr S Income 2 450 000 2 400 000 (includes all types of income) Less expenses 1 633 000 1 600 000 (including COGS) Profit before tax 817 000 800 000 Less income tax expense 280 780 261 000 Profit after tax 536 220 539 000 Retained earnings - opening bal 580 000 300 000 Less: dividends declared 200 000 180 000 Balance Sheet items: Retained earnings - closing bal 916 220 659 000 Asset revaluation surplus 134 900 70 000 Share capital 600 000 700 000 Total equity $1 651 120 $1 429 000 The Consolidation Worksheet for Y Ltd for the financial year ended 31 March 2018 Y Ltd Z Ltd Notional Journal Entries Group Balance Sheet items continued: S $ Dr S Cr Bank overdraft 2 300 Dividend payable 75 000 120 000 Loan payable to Z Ltd 60 000 Interest payable to Z Ltd 1 200 Various liabilities 2 352 380 598 900 Rent payable to Y Ltd 5 000 Total liabilities 2 490 880 723 900 Total equity and liabilities $4 142 000 $2 152 900 Cash 6 700 Inventory 174 000 140 000 Interest receivable from Y Ltd 1 200 Loan receivable from Y Ltd 60 000 Dividend income receivable 120 000 Rent receivable from Z Ltd 5 000 Various assets 638 000 945 000 PPE (net) 1 705 000 1 000 000 Investment in Z Ltd 1 500 000 Goodwill Total assets $4 142 000 $2 152 900 Consolidation Worksheet for Y Ltd for the financial year ended 31 March 2018 Y Ltd Z Ltd Notional Journal Entries Group Income statement/dividend items: $ S S Dr $ Cr S Income 2 450 000 2 400 000 (includes all types of income) Less expenses 1 633 000 1 600 000 (including COGS) Profit before tax 817 000 800 000 Less income tax expense 280 780 261 000 Profit after tax 536 220 539 000 Retained earnings - opening bal 580 000 300 000 Less: dividends declared 200 000 180 000 Balance Sheet items: Retained earnings - closing bal 916 220 659 000 Asset revaluation surplus 134 900 70 000 Share capital 600 000 700 000 Total equity $1 651 120 $1 429 000 The Consolidation Worksheet for Y Ltd for the financial year ended 31 March 2018 Y Ltd Z Ltd Notional Journal Entries Group Balance Sheet items continued: S $ Dr S Cr Bank overdraft 2 300 Dividend payable 75 000 120 000 Loan payable to Z Ltd 60 000 Interest payable to Z Ltd 1 200 Various liabilities 2 352 380 598 900 Rent payable to Y Ltd 5 000 Total liabilities 2 490 880 723 900 Total equity and liabilities $4 142 000 $2 152 900 Cash 6 700 Inventory 174 000 140 000 Interest receivable from Y Ltd 1 200 Loan receivable from Y Ltd 60 000 Dividend income receivable 120 000 Rent receivable from Z Ltd 5 000 Various assets 638 000 945 000 PPE (net) 1 705 000 1 000 000 Investment in Z Ltd 1 500 000 Goodwill Total assets $4 142 000 $2 152 900