You are a senior accountant in a top-tier accounting firm. Your senior manager has asked you to assist your client, Diamond Ltd, in the preparation of consolidated financial statements for the year ended 30 June 2051. The senior manager hands you a file which contains important information about Diamond Ltd and the acquisition of Zirconia Ltd. On 1 July 2050, Diamond Ltd acquired all the issued shares (ex. div) of Zirconia Ltd for $3,440,000. At this date the equity of Zirconia Ltd consisted of: The identifiable assets and liabilities recorded on the balance sheet of Zirconia Ltd were at amounts equal to fair value except for: Additional information: - 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 2051. - The Equipment on hand on the day of acquisition had an original cost of $1,300,000 - This equipment has a remaining useful life of four years, is depreciated using the straight-line method and has a residual of nil. - On the day of acquisition, the balance sheet of Zirconia Ltd included Goodwill of $100,000. - Zirconia Ltd also held a Brand Name with a fair value of $480,000 that was not recorded on the balance sheet. - The Brand Name was considered to have an indefinite useful life. - Zirconia Ltd transferred $1,200,000 from retained earnings to the general reserve on 1 July 2050. - Zirconia Ltd transferred $600,000 from retained earnings to the general reserve on 30 June 2052. (c) Prepare the pre-acquisition elimination entries for the consolidation worksheet for the Diamond Ltd Group for the financial year ended 30 June 2051. 10 marks You are a senior accountant in a top-tier accounting firm. Your senior manager has asked you to assist your client, Diamond Ltd, in the preparation of consolidated financial statements for the year ended 30 June 2051. The senior manager hands you a file which contains important information about Diamond Ltd and the acquisition of Zirconia Ltd. On 1 July 2050, Diamond Ltd acquired all the issued shares (ex. div) of Zirconia Ltd for $3,440,000. At this date the equity of Zirconia Ltd consisted of: The identifiable assets and liabilities recorded on the balance sheet of Zirconia Ltd were at amounts equal to fair value except for: Additional information: - 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 2051. - The Equipment on hand on the day of acquisition had an original cost of $1,300,000 - This equipment has a remaining useful life of four years, is depreciated using the straight-line method and has a residual of nil. - On the day of acquisition, the balance sheet of Zirconia Ltd included Goodwill of $100,000. - Zirconia Ltd also held a Brand Name with a fair value of $480,000 that was not recorded on the balance sheet. - The Brand Name was considered to have an indefinite useful life. - Zirconia Ltd transferred $1,200,000 from retained earnings to the general reserve on 1 July 2050. - Zirconia Ltd transferred $600,000 from retained earnings to the general reserve on 30 June 2052. (c) Prepare the pre-acquisition elimination entries for the consolidation worksheet for the Diamond Ltd Group for the financial year ended 30 June 2051. 10 marks