Undervalued assets, partial goodwill method, intragroup transactions   LO3, 4, 5, 6 On 1 July 2019, Marcus Ltd acquired 80% of the issued shares of Jett Ltd for $264 800. On that date, the statement of financial position of Jett Ltd consisted of: Share capital $ 250 000 General reserve 10 000 Asset revaluation surplus 15 000 Retained earnings 10 000 Liabilities 180 000 $ 465 000 Cash 35 000 Inventories 70 000 Land 65 000 Plant and equipment 300 000 Accumulated depreciation — plant and equipment (130 000) Trademark 100 000 Goodwill 25 000 $ 465 000 At 1 July 2019, all identifiable assets and liabilities of Jett Ltd were recorded at fair value except for the following. Carrying amount Fair value Inventories $ 70 000 $ 80 000 Land 65 000 85 000 Plant and equipment (cost $300 000) 170 000 190 000 Trademark 100 000 110 000 During the year ended 30 June 2020, all inventories on hand at the beginning of the year were sold, and the land was sold on 28 February 2020 to Outback Ltd, an external party, for $70 000. The plant and equipment had a further 5‐year life beyond 1 July 2019 and was expected to be used evenly over that time. The trademark was considered to have an indefinite life. Any adjustments for differences at acquisition date between carrying amounts and fair values are made in the consolidation worksheet. Marcus Ltd uses the partial goodwill method. The tax rate is assumed to be 30%. Financial information for Marcus Ltd and Jett Ltd for the year ended 30 June 2020 is as follows. Marcus Ltd Jett Ltd Sales revenue $200 000 $172 000 Other income 75 000 30 000 275 000 202 000 Cost of sales 162 000 128 000 Other expenses 53 000 31 000 215 000 159 000 Profit from trading 60 000 43 000 Gains/(losses) on sale of non‐current assets 10 000 5 000 Profit before tax 70 000 48 000 Income tax expense 20 000 18 000 Profit for the period 50 000 30 000 Retained earnings (1/7/19) 30 000 10 000 Transfer from general reserve — 8 000 80 000 48 000 Interim dividend paid 12 000 10 000 Final dividend declared 6 000 4 000 18 000 14 000 Retained earnings (30/6/20) $ 62 000 $ 34 000 Asset revaluation surplus (1/7/19) $ 15 000 Gain on revaluation of specialised plant 5 000 Asset revaluation surplus (30/6/20) $ 20 000 The transfer from general reserve for Jeff Ltd is from pre-acquisition equity. During the year ended 30 June 2020, Jett Ltd sold inventories to Marcus Ltd for $8000. The original cost of these items to Jett Ltd was $5000. One‐third of these inventories were still on hand at the end of the year. On 31 March 2020, Jett Ltd transferred an item of plant with a carrying amount of $10 000 to Marcus Ltd for $15 000. Marcus Ltd treated this item as inventories. The item was still on hand at the end of the year. Jett Ltd applied a 20% p.a. depreciation rate to this type of plant. Required 1. Prepare the consolidation worksheet entries necessary for preparation of the consolidated financial statements for Marcus Ltd and its subsidiary for the year ended 30 June 2020. 2. Prepare the consolidated statement of profit or loss and other comprehensive income and statement of changes in equity for Marcus Ltd and its subsidiary at 30 June 2020.