You are a senior accountant in a top-tier accounting firm. Your senior manager has asked you to assist your client, Daisy Ltd, in the preparation of consolidated financial statements for the year ended 30 June 2035. The senior manager hands you a file which contains important information about Daisy Ltd and the acquisition of Rose Ltd.

Share capital$187,500Retained earnings$575,000

On 1 July 2033, Daisy Ltd acquiredall the issued shares (ex. div) of Rose Ltd for $935,000. At this date the equity of Rose Ltd consisted of:

The identifiable assetsand liabilities recordedon the balance sheet of Rose Ltd were at amounts equal to fair value except for:

Fair valueCarrying amountInventory$70,000$56,250Machinery$237,500$187,500

Additional information:

• Adjustments for differences between carrying amountsand fair valuesat acquisition date are made on consolidation.
• The tax rate is 30%.
• The inventories on hand on the day of acquisition were sold by 30 June 2034.
• The machinery on hand on the day of acquisition had an originalcost of $350,000.
• This machinery has a remaininguseful life of five years, is depreciated using the straight-line method and has a residual of nil.
• On the day of acquisition, the balance sheetof Rose Ltd included goodwillof $25,000.
• On the day of acquisition, Daisy Ltd identified a brand name with a fair value of $112,500that was not recorded on the balance sheet of Rose Ltd.
• The brand name was considered to have an indefinite usefullife.
• Rose Ltd transferred $200,000 from retainedearnings to the general reserveon 30 June 2035.
• The goodwill acquiredby Daisy Ltd has been impaired by $15,000 on 30 June 2035.

Financial information for Daisy Ltd and Rose Ltd for the year ended 30 June 2035 is shownon the following page. Required:

1. Prepare the consolidation journalentries required to prepare the consolidated accountsfor Daisy Ltd Group as at 30 June 2035.
2. Prepare the consolidation worksheet for the Daisy Ltd Group as at 30 June 2035.
3. Prepare the consolidated financialstatements for the Daisy Ltd Group the year ended 30 June 2035.

Note: the consolidated financialstatements include: consolidated statement of profitand loss and other comprehensive income, consolidated statement of changes in equity, and the consolidated statement of financial position. You are not required to prepare a consolidated statement of cashflows.

Financial Information for the year ended 30 June 2035