Reporting questiin
Consolidation worksheet
Ethan Ltd acquired all the issued shares (ex div.) of Darren Ltd on 1 July 2017 for
$110 000. At this date Darren Ltd recorded a dividend payable of $10 000 and equity of:
All the identifiable assets and liabilities of Darren Ltd were recorded at amounts equal to their fair values at acquisition date except for:
The machinery was considered to have a further 5-year life. Of the inventory, 90% was sold by 30 June 2018. The remainder was sold by 30 June 2019.
Both Darren Ltd and Ethan Ltd use the valuation method to measure the land. At 1 July 2017, the balance of Ethan Ltd’s asset revaluation surplus was $13 500.
In May 2018, Darren Ltd transferred $3000 from the retained earnings at 1 July 2017 to a general reserve.
The tax rate is 30%.
The following information was provided by the two companies at 30 June 2018.
Required:
1- Acquisition Analysis at 30 June 2018.
2- Worksheet Adjustment journal entries at 30 June 2018.