Based on the information provided below, prepareappropriate consolidation journal entriesfor possible account adjustment or elimination. (7 Mark)

Reference appropriate accounting standards to explain the approach which needs to be taken for the adjusting journals. (3 Mark)

Parent paid $110 000 on 30 June for all the shares of Subsidiary, whose equity at that date is share capital $72 000 and retained profits $28 000. However, the assets of Subsidiary are not all recorded at their fair value. Assume that all companies adoptthe revaluation modelunderAASB 116. The discrepancies are:

Investments Accounts receivable PPE

Inventory

Franchise

26 000 14 000 26 000 70 000 Nil

54 000 8 000 12 000 76 000 10 000