On 1 July 2016, Yoshi Ltd acquired 70% of the share capital of Wario Ltd for $210,000. At thisdate, the equity of Wario Ltd consisted of:

$Share capital 170,000

General reserve 30,000

Retained earnings 50,000

At the date of acquisition all assets and liabilities of Wario Ltd were carried in their accountingrecords at fair values with the exception of a block of land with the fair value being $25,000above the carrying amount.

Additional information:

(a)On 1 January 2017, Wario Ltd purchased inventory from Yoshi Ltd for $20,000 at amark-up of 25%. By 30 June 2017, Wario Ltd still held inventory that it had bought fromYoshi Ltd for $8,000.

(b)The transfer to the general reserve by Wario Ltd during the year was from post-acquisition retained earnings.

(c) The group uses the full goodwill method. The fair value of the non-controlling interest at 1 July 2016 was $85,000.

(d) The tax rate is 30%.

 

Required:

Complete the consolidated worksheet for Yoshi Group for the year ended 30 June 2017 on the following page. The NCI Must be completed using the 3 step method. Please note marks are only awarded for the completion of worksheet – journal entry will not be marked. (15 marks)

 

Account Yoshi
$
Wario
$
Adjustments Group
$
NCI Parent
$
DR
$
CR
$
DR
$
CR
$
Revenues      668,000      322,000
Expenses –    544,000 –    242,000
Net profit before tax      124,000        80,000
Income tax expense –      51,000 –      30,000
Net profit after tax        73,000        50,000
Ret. earnings 1/7/16      120,000        50,000
Dividend paid –      15,000 –      12,000
Tfr to general reserve              – –        9,000
Ret. earnings 30/06/17      178,000        79,000
Share capital      350,000      170,000
General reserve        40,000        39,000
BCVR              –              –
Total equity – parent
NC I
TOTAL EQUITY      568,000      288,000
Other liabilities        27,000              –
Accounts payable        40,000        19,000
Land              –        67,000
Depreciable assets (net)      150,000      119,000
Invest. in Wario Ltd      210,000              –
Goodwill              –              –
Inventory      100,000        75,000
Other assets          5,000              –
Accounts receivable        83,000        16,000
Cash        87,000        30,000
TOTAL NET ASSETS      568,000      288,000

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