Parent Ltd acquired 100% of the issue shares of Subsidiary Pty Ltd
Question 1 Consolidation Parent Ltd Subsidiary Ltd DR CR Consolidated Sales 700,000 500,000 Dividend income 2,000 0 Expenses 290,000 260,000 Profit 412,000 240,000 Retained earnings 1 July 2015 300,000 250,000 Less Dividend declared -1,000 -2,000 Retained earnings 30 June 2016 711,000 488,000 Share capital 1,000,000 600,000 General reserve 200,000 0 Trade and other creditors 530,000 208,000 Dividend payable 1,000 2,000 Income tax payable 140,000 42,000 2,582,000 1,340,000 Trade and other receivables 643,000 508,000 Dividend receivable 2,000 0 Shares in Subsidiary Ltd 900,000 – Property plant and equipment (net) 730,000 710,000 Inventories 200,000 20,000 Other assets 107,000 102,000 Goodwill on consolidation 2,582,000 1,340,000 Parent Ltd paid for subsidiary’s equity for $900,000 Question 2 Consolidation Parent Ltd Subsidiary…
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