Solution 1 Journal entries for consolidation

Account
Consolidated income statement
Inventory (27000+18000)*1/3
Unrealized profit eliminated
Deferred tax asset (3000*30%)
Deferred tax income
Being deferred tax on unrealized profit recorded

Solution 2 Consolidated income statement

Inventory (18000*20%/120%)*25%
Unrealized profit eliminated
Deferred tax assets (750*30%)
Deferred tax income
recording deferred tax

Solution 3 Dividend Payable

Dividend Receivable
Unpaid dividend removed

Solution 4 Dividend income

Retained Earnings
Being interim dividend eliminated

Solution 5 Total profit on sales of warehouse

Asset cost on 1st jan 2018
minus depreciation " 5% for 6 months - 2.5%
Minus depreciation for the year 1 July 2018 to 30 June 2019 (150000*5%)
Carrying value on 30th June 20129
Unrealized profit = Total profit/purchase cost * Carrying value
Journal Entry
Account
Consolidated income statement
Warehouse
Recording unrealized gain reduction
Deferred tax asset (24975 * 30%)
Deferred tax income
recording deferred tax
tion
Debit Credit
3000
3000

900
900

750
750

225
225

2000
2000

4500
4500

15000-123000 27000
150000
-3750
-7500
138750
27000/15000*138750 24975

Debit Credit

7492.5
7492.5
Working 1
Statement of net assets of Cassowary ltd

Share capital
Retained earnings

Add - Dividend Paid

Less: Unrealized profit on stock (84000-70000)
Add: Deferred tax assets @ 30% on U/P (14000*30%)

Attribute to EMU @ 80%

Attribute to NCI @20%

Working 2
Calculations of goodwill
Cost of investment
Add: NCI @ PSNA (925000*20%)
Less: Identifiable net asset at the date of acquisition
Goodwill at acquisition date
Less: Impairment loss
Previous Year
Current Year
Goodwill at the year end

Working 3
NCI at end
NCI at acquisition date
Add: Post acquisition profits
Less: Dividend paid (232500*20%)

Note: NCI is at proportionate share in the net assets. The value of goodwill is partial therefore the G/L of goodwill is
not allocated to NCI.

Working 4
Retained Earnings of Group at the Year End
Retained Earning of EMU
Add: Post acquisition profits
Less: Dividend paid (232500*80%)
Less: Goodwill impairment loss current year
Less: U/P of stock T/F (30000-24000)
Add: DTA on U/P (6000*30%)
Less: UP on sale of M/C net of depr (290000-202500)=87500
87500-(87500/6 years) * 1
Add DTA (14583*30%)

Less: Goodwill of previous year

Working 4
Journal Entry
Account
Identifiable net assets (Dr)
Goodwill (Dr)
NCL (Cr)
Investment in Crossoway (Cr)
U/P on stack with EMU (Dr)
DTA (Dr)
Consolidated Stock (Cr)

Consolidated balance sheet as at 30-06-2019

Non Current Assets

Current Assets

Total Assets
Equity & Liability
Share Equity
Share Capital
Retained Earning
NCI
Non Current Liability
Loans (433750+290000)
Current Liability
Accounts Payables (1366750+115750)
Tax Payable (103250+62500)
Total liabilities and Equity

Consolidated statement of profit and loss for the period ended 30-06-2019
Revenue from operations
Other income - management fee - intra group elimination
Other income - Dividend income - intra group elimination
Other income - profit on sale of plant (parent) (87500-72917)
Cost of goods sold
(1160000+595000-162500-130000+14000+6000)
Administrative expenses (77000+96750)
Depreciation (61250+142000)
Amortization - Goodwill - Current Year
Management fees (intra group)
Other expenses (252750+192500)

Attributed to NCI
Attributed to parent

Consolidated statement of profit and loss for the period ended 30-06-2019

Opening Balance
Add: NCI post acquisition date (at beg) profit
Add: total comprehensive income
less: dividend paid
By Parent
By Subs (232500*80%)

Add: Post acquisition profit at beginning that is attributed to parent

Closing Balance
ment of net assets of Cassowary ltd
DOA Changes DOC
1/7/2010 30-6-2019
500000 - 500000
425000 192500 617500
925000 192500
- 232500
-14000
4200
925000 415200
332160
83040

ns of goodwill
890000
185000
-925000
150000

-56250
-7500
86250

185000
83040
-46500
221540
e value of goodwill is partial therefore the G/L of goodwill is
ated to NCI.

f Group at the Year End

815,000
332,160
(186,000)
(7,500)
(600)
1,800
(72,917)
 4,375
886,318
(56,250)
830,068

Journal Entry
Debit Credit
925,000
150,000
185,000
890,000
14,000
4,200
18,200

balance sheet as at 30-06-2019

on Current Assets
Land & Building (560000+815000) 1375000
PPE (749625+889500-214375-347000-72917) 1004833
Goodwill 86250
DTA (1800+4375+4200) 10375
Current Assets
Account Receivables (148500+155750) 304250
Inventory (230000+72500-14000-6000) 282500
3063208
Equity & Liability

875,000.0
824,668.0
221,540.0
on Current Liability
723,750.0
Current Liability
252,500
165,750
3,063,208

ofit and loss for the period ended 30-06-2019

2,882,500

14,583
 A 2,897,083

(1,482,500)
(173,750)
(203,250)
(7,500)
0
(445,250)
B (2,312,250)
Profit After tax (A-B) 584,833
Tax Expense (153750+105500) (259,250)
Deferred tax asset (1800+4375+4200) 10,375
Profit after tax 335,958
Other comprehensive income 0
Total comprehensive income 335,958
(252000-14000+4200)*20% (48,440)
(335958-48440) 287,518

of profit and loss for the period ended 30-06-2019

Retained Earning Total NCI
798,500 798,500 185,000
34,600
287,518 287,518 48,440

(343,500) (343,500)
(186,000) (186,000) (46,500)
556,518 556,518 221,540
268,150 268,150
824,668 824,668 221,540
 Journal Entry
Account Debit Credit
Identifiable net assets (Dr) 925,000
Goodwill (Dr) 150,000
NCL (Cr) 185,000
 Investment in Crossoway (Cr) 890,000
U/P on stack with EMU (Dr) 14,000
DTA (Dr) 4,200
Consolidated Stock (Cr) 18,200
Other income 162,500
Sales to Richard 162,500
Inventory 162,500
Other income 162,500
Other income 14,583
Sales of PPE 14,583
Impairement of Goodwill 7,500
Goodwill 7,500
Management Fees Expense 0
Retaineed Earning 0