On 1 July 2015, Sweets Ltd purchased 80% of the issued shares of Savoury Ltd
ACC567 Financial Accounting 2 Question 1 – Consolidation: Principles, accounting requirements, intra-group transactions and non-controlling interests On 1 July 2015, Sweets Ltd purchased 80% of the issued shares of Savoury Ltd for $890,000. At the date of acquisition, the equity of Savoury Ltd consisted of share capital and retained earnings of $500,000 and $425,000 respectively. At the date of acquisition, all assets of Savoury Ltd were recorded at fair value, except for inventory, that had a fair value which was $10,000 higher than its carrying amount. All of this inventory was on-sold to external parties by 30 June 2016. As at 30 June 2017, the following financial statements have been extracted from the financial records of Sweets Ltd and Savoury Ltd: Sweets Ltd…
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