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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