Billy Ltd acquired all the issued shares of Joel Ltd on 1 January 2022 for $36 000. At this date, the equity of Joel Ltd consisted of the following:

• Share capital: 25 000
• General reserve: 6 250
• Retained earnings: 2 500

All the identifiable assets and liabilities of Joel Ltd were recorded at amounts equal to their fair values except for the following:

Carrying amount Fair value

Inventories 6 000 8 000

Plant (cost $35 000) 25 000 26 000

Of the inventories on hand at 1 January 2022, 90% was sold by 30 June 2022. The remainder was sold by 30 June 2023. The plant was considered to have a further 2-year useful life with benefits to be received equally in each of those years. The tax rate is 30%.

Required:

1. Prepare the acquisition analysis at 1 January 2022.
2. Prepare the consolidation worksheet entries for Billy Ltd's group at 30 June 2022.
3. Prepare the consolidation worksheet entries for Billy Ltd's group at 30 June 2023.
4. Prepare the consolidation worksheet entries for Billy Ltd's group at 30 June 2024.

Answer rating: 100% (QA)

Acquisition analysis at 1 January 2022 Fair value of identifiable assets and liabilities of Joel Ltd 25 000 6 250 2 500 equity 8 000 6 000 1 30 BCVR inventories 26 000 25 000 1 30 BCVR plant 35 850 Co... View the full answer