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You are a senior accountant in an accounting firm in Australia. Your senior manager has asked you to assist your client, Cherry Ltd , in
You are a senior accountant in an accounting firm in Australia. Your senior manager has asked you to assist your client, Cherry Ltd in the preparation of consolidated financial statements for the year ended June The senior manager hands you a file which contains important information about Cherry Ltd and the acquisition of Blossom Ltd
On July Cherry Ltd acquired all the issued shares ex div of Blossom Ltd for $ At this date the equity of Blossom Ltd consisted of:
Share capital: $
General reserve: $
Retained earnings: $The identifiable assets and liabilities recorded on the balance sheet of Blossom Ltd were at amounts equal to fair value. Additional information:
Adjustments for differences between carrying amounts and fair values at acquisition date are made on consolidation.
The tax rate is
On the day of acquisition, the balance sheet of Blossom Ltd included goodwill of $
On the day of acquisition, Cherry Ltd identified a publishing title with a fair value of $ that was not
recorded on the balance sheet of Blossom Ltd
The publishing title was considered to have an indefinite useful life.
The goodwill acquired by Cherry Ltd has been impaired by $ on June
On January Blossom Ltd sold inventories to Cherry Ltd for $ Half of the inventories were still on
hand at June The inventory cost Blossom Ltd $
On January Blossom Ltd sold inventory to Cherry Ltd for $ which cost $ Cherry Ltd treated
this inventory as equipment and depreciates this item at per annum on a straightline basis.
Financial information for Cherry Ltd and Blossom Ltd for the year ended June is shown on the following page.
Required:
Prepare the consolidation journal entries required to prepare the consolidated accounts for Cherry Ltd Group as at June
Prepare the consolidation worksheet for the Cherry Ltd Group as at June
Prepare the consolidated financial statements for the Cherry Ltd Group the year ended June
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.Financial Information for the year ended June
tableCherry LtdBlossom LtdSales revenue,
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