Calculation for equity accounting for Johnson ltd.

Question (15 marks} Johnson Ltd had the following Balance Sheet: Johnson Ltd Balance Sheet As at 31 December 2015 Assets Cash 800 000 Other assets (net) 200 000 Total net assets $1 000 000 Equity Paid-up capital 400 000 Retained prots 600 000 Total equity in 000 000 Additional inammation: 0 Johnson Ltd paid $300 000 to purchase 30% of the 500 000 ordinary shares of Wright Ltd on 1 January 2016. This purchase resulted in Johnson Ltd having signicant inuence over Wright Ltd. 0 During theyearended 31 December 2016, Wright Ltd reported prot of5100000and revalued its assets upwards by $50 000. I Wright Ltd's total dividends paid out to all shareholders during 2016 amounted to $20 000. This was paid from current period prots. 0 During the year ended 31 December 2016, Johnson Ltd made a prot (not including revenue from share investments) of $140 000 and paid a dividend of $20 000. All sales were made in cash. Gilly Ltd is 50% owned by Johnson Ltd and is its associate. During 2016, Wright sold $15 000 of inventory to Gilly Ltd and made prot of $5 000. At the end of 2016, all of this inventory was still held by Gilly Ltd. REQUIRED (I) Prepare general journal entries for Johnson Ltd to record all events in 2016 for is investment in Wright Ltd using equity accounting. Use Australian Accounting standards but classify income from associates in a way that would provide appropriate information regarding prudent distribution of cash flows. Namtions are not required. (10 marks) (b) Construct a Balance Sheet for Johnson Ltd as at 31 December 2016. Please note that no marks will be allocated to workings