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. On 1 July 2033, Daisy Ltd acquired all the issued shares (ex. div) of Rose Ltd for $935,000. At this date the equity of Rose Ltd consisted of: Share capital Retained earnings The identifiable assets and liabilities recorded on the balance sheet of Rose Ltd were at amounts equal to fair value except for: Inventory Machinery Additional information: $187,500 $575,000 Fair value $70,000 $237,500 Carrying amount $56,250 $187,500 Adjustments for differences between carrying amounts and fair values at 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 original cost of $350,000. The brand name was considered to have an indefinite useful life. Rose Ltd transferred $200,000 from retained earnings to the general reserve on 30 June 2035. The goodwill acquired by 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 shown on the following page. Required: 1. This machinery has a remaining useful life of five years, is depreciated using the straight-line method and has a residual of nil. On the day of acquisition, the balance sheet of Rose Ltd included goodwill of $25,000. On the day of acquisition, Daisy Ltd identified a brand name with a fair value of $112,500 that was not recorded on the balance sheet of Rose Ltd. Prepare the consolidation journal entries required to prepare the consolidated accounts for 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 financial statements for the Daisy Ltd Group the year ended 30 June 2035. Note: the consolidated financial statements include: consolidated statement of profit and 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. Revenues Expenses Financial Information for the year ended 30 June 2035 Daisy Ltd Gains on sale of non-current assets Profit before tax Income tax expense Profit for the year Other comprehensive income: Gains on revaluation of equipment (net of tax) Comprehensive income for the year Profit for the year Retained earnings (1/7/34) Dividend paid Transfer to general reserve Retained earnings (30/6/35) Share capital General reserve Asset revaluation surplus Retained earnings Total equity Provisions DTL Payables Total liabilities Total equity and liabilities Cash Accounts receivable Inventories Equipment Accumulated depreciation - equipment Goodwill Shares in Rose Ltd Total assets 875,000 -200,000 675,000 50,000 725,000 -150,000 575,000 0 30,000 605,000 575,000 1,036,000 1,611,000 -79,000 0 1,532,000 280,000 50,000 90,000 1,532,000 1,952,000 37,500 20,000 80,000 137,500 2,089,500 634,500 170,000 75,000 575,000 -300,000 0 935,000 2,089,500 Rose Ltd 275,000 -190,000 85,000 0 85,000 -15,000 70,000 0 0 70,000 70,000 945,000 1,015,000 0 -200,000 815,000 187,500 200,000 0 815,000 1,202,500 20,000 10,000 20,000 50,000 1,252,500 755,000 185,000 175,000 350,000 -237,500 25,000 0 1,252,500