RECENT ASSIGNMENT

Assignment Question 3: (topic from chapter 28: worksheet examples refer to pages
924.928, 933. 938. 941-942. 944. 951-952)
On 1/7/14. Adam Ltd acquires all the share capital of Luke Ltd for 5290.000. The equities of Luke Ltd at the date of acquisition were as follows:
Share Capital 5150.000
General Reserve 530.000
Retained Earnings 560.000
Goodwill 510.000
All assets and liabilities of Luke Ltd were of fair value at DOA except the land had the fair value of 5150.000. The carrying amount of the land is recorded at 5140.000.
Provide the workings of necessary worksheet consolidation entries (no marks given) and complete the worksheet below.
Adam Ltd Luke Ltd Adj. Dr. Adj. Cr. Group
Income $50.000 334.000
Other income 514.000 512.000
Expenses $21.000 515.000
Income tax expense 38.000 $5.000
Profit for the period 535.000 $25,000
Retained earnings (1/7/15) 590.000 380.000
Transfer from general reserve $0 $0
Retained earnings (30/6/16) 5125,000 5105.000
Share capital 3558,000 5150.000
General reserve $92.000 530.000
Fair Value Adjustment
Provisions $30.000 $30.000
Payables 515.000 $25,000
Deferred tax liability
Loans $50.000 5110.000
Total equities and liabilities $970,000 5450.000
Plant $600,000 $820.000
Accumulated depreciation 4295,000 -3550,000
Futures 5305,000 3120.000
Accumulated depreciation 4180,000 -380.000
Land 5200,000 5140.000
Brands $50.000 $30.000
Shares in Luke Ltd $230,000
Inventory $45.000 $40.000
Cash $5.000 57.000
Receivables 515.000 513.000
Deferred tax asset
Goodwill 510.000
Total assets $970,000 $450.000