Assignment Question (Part A)

On 1 July 2022, Sunlight Ltd acquired all the shares of Moonlight Ltd for $420,000.
At that date, Moonlight Ltd's equity consists of the following:
Share capital	200000
General reserve	48000
Retained earnings	88000
All assets and liabilities of Moonlight were recorded at fair value except for the following:
	Carrying amount	Fair value
Inventories	20000	24000
Plant (cost $60,000)	44000	50000
It was estimated that the plant had a further useful life of 10 years and was depreciated on a
straight-line basis. All the inventories were sold by 30 June 2023. Impairment tests were undertaken
at the end of the period, Goodwill were impaired by $1100.
Additionally, the following transactions had happened for the year ending 30 June 2023.
a. Sunlight provided management services to Moonlight Ltd and collected fee of $16,000.
b. Moonlight sold inventory costing $12,000 to Sunlight for $15,000 on 4 January 2023. At 30 June
2023, Sunlight had sold a quarter of these inventories to Matta Ltd for $39,000.
c. on 1 January 2023, Sunlight sold a plant to Moonlight for $ 25,000. This plant cost Sunlight $18,000.
On this date, the carrying amount of plant is $13,000. The plant is depreciated at 10% per annum.
Company tax rate is 30%.

On 30 June 2023, the financial information of Sunlight and Moonlight are as follows:

	Sunlight	Moonlight
Revenue	190000	110000
Expenses	-80000	-76000
Profit before tax	110000	34000
income tax expense	-35000	-2000
Profit for the year	75000	32000
Retained earnings at 1 July 2022	80000	88000
Dividends paid	-34000	-15000
Retained earnings at 30 June 2023	121000	105000
Share capital	280000	200000
General reserve	20000	48000
Asset revaluation surplus	24000	0
Retained earnings	121000	105000
Total Equity	445000	353000
Provisions	35000	12000
Payables	50000	8000
Total liabilities	85000	20000
Total Equity and liabilities	530000	373000
Cash	12000	30000
Accounts receivable	28000	12000
inventories	30000	51000
Plant and equipment	160000	320000
Accumulated depreciation	-120000	-40000
Investment in subsidiary	420000	0
Total assets	530000	373000

Required:

1. Prepare Acquisition Analysis

2. Prepare Consolidation adjusting entries required for the consolidation worksheet

3. Complete consolidation worksheet

4. Prepare consolidated income statement and Consolidated Balance Sheet for Sunlight Ltd Group