Case study Hi, could you please have a look at my journal entry table and figure out the correct figures and where am I wrong All italic, bolded, underline and question mark figures on the right and the text on the left hand side below are wrong and affecting all below Templates from A to E Could you please use your knowlege to correct my mistakes and accordingly change figures on Templates A to E thank you so much ) Share capital $1 500 000 Retained earnings $700 000 $2 200 000 As of 30 June 2018 (that is, two years after the date of the acquisition) the financial statements of the two companies are as follows Bells Ltd ($000) Torquay Ltd ($000) A detailed reconciliation of opening and closing retained earnings Sales revenue 480 115 Cost of goods sold (100) (40) Other expenses (80) (15) Other revenue 70 25 Profit before tax 370 85 Tax expense 60 30 Profit for the year 310 55 Retained earnings30 June 2017 1 000 800 1 310 855 Dividends paid (160) (30) Dividend declared (40) (10) Retained earnings30 June 2018 1 110 815 Statement of financial position Shareholders' equity Retained earnings 1 110 815 Share capital 4 000 1 500 Current liabilities Accounts payable 20 30 Dividends payable 40 10 Non current liabilities Loans 600 250 Total of liabilities and equity 5 770 2 605 Current assets Cash 150 25 Accounts receivable 242 175 Dividends receivable 8 Inventory 500 300 Non current assets Land 1400 1105 Plant 1870 1300 Accumulated depreciation (400) (300) Investment in Torquay Ltd 2 000 Total assets 5 770 2 605 Other information The management of Bells Ltd values any non controlling interest in Torquay Ltd at fair value During the current financial year, Torquay Ltd pays management fees of $10 000 to Bells Ltd This item is included in 'other' expenses and income During the current financial year, Bells Ltd sold inventory to Torquay Ltd at a price of $30 000 The inventory cost Bells $22 000 to produce Fifty per cent of this inventory is still on hand with Torquay Ltd at the end of the financial year (Hint as this unrealised profit relates to sales made by Bells Ltd then no adjustments are necessary when calculating non controlling interests in Torquay Ltd ) During the current financial year, Torquay Ltd sold inventory to Bells Ltd at a price of $20 000 The inventory cost Torquay Ltd $14 000 to produce Forty per cent of this inventory is still on hand with Bells Ltd at the end of the financial year (Hint as this unrealised profit relates to sales made by Torquay Ltd then adjustments will be necessary when calculating non controlling interests in Torquay Ltd ) In the preceding financial year, Torquay Ltd sold inventory to Bells Ltd at a price of $11 000 The inventory cost Torquay Ltd $8000 to produce At 30 June 2017, 20 per cent of this inventory was still held by Bells Ltd (Hint this information will be used to make an adjustment to non controlling interests in Torquay Ltd ) The management of Bells Ltd believes that goodwill acquired has subsequently been impaired It was impaired by $12 000 in the year to 30 June 2017, and by a further $12 000 in the year to 30 June 2018 (Hint because the non controlling interest in Torquay is being valued at fair value, then this will mean that the non controlling interest will incorporate a proportional share of goodwill Therefore, any impairment in goodwill will impact the non controlling interest in Torquay Ltd ) On 1 July 2017 Torquay Ltd sold an item of plant to Bells Ltd for a price of $45 000 when its carrying amount in Torquay Ltd 's accounts were $25 000 (cost $50 000, accumulated depreciation $25 000) This item of the plant was being depreciated over a further 10 years, with no expected residual value (Hint as this unrealised profit relates to a sale of plant made by Torquay Ltd then adjustments will be necessary when calculating non controlling interests in Torquay Ltd ) On 30 June 2018, the directors of Torquay Ltd declared and communicated to their shareholders that they would pay a final dividend amounting to $10 000 (Hint dividends paid by Torquay will act to reduce the non controlling interest in Torquay ) Bells ltd policy and procedures The organisation has the following policies and procedures to consolidate the financial accounts Uniform Accounting Policies Bells Ltd shall prepare consolidated financial statements using uniform accounting policies for like transactions andother events in similar circumstances Consolidation of an investee shall begin from the date the investor obtains control of the investee and cease when the investor loses control of the investee Changes in a parent's ownership interest in a subsidiary that do notresult in the parent losing control of the subsidiary areequity transactions (i e transactions with owners in their capacity as owners) Non Controlling Interests Bells ltd shall present non controlling interests in the consolidated statement of financial position within equity, separately from the equity of the owners of the parent Loss of Control If Bells Ltd loses control of a subsidiary, the parent derecognises the assets and liabilities of the former subsidiary from the consolidated statement of financial position recognises any investment retained in the former subsidiary at its fair value when control is lost and subsequently accounts for it and for any amounts owed by or to the former subsidiary in accordance withrelevant IFRSs and recognises the gain or loss associated with the loss of control attributable to the former controlling interest Conversions and Consolidation procedures Conversion procedures In case if the transaction happens in a foreign currency, the organisation uses the current rates of transactions Consolidated financial statements combine like items of assets, liabilities, equity, income, expenses and cash flows of the parent with those of its subsidiaries eliminate the carrying amount of the parent's investment in each subsidiary and the parent's portion of equity of each subsidiary and eliminate in full intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between entities of the group (profits or losses resulting from intragroup transactions that are recognised in assets, such as inventory and fixed assets, are eliminated in full) Intragroup losses may indicate an impairment that requires recognition in the consolidated financial statements AASB 112 Income Taxes applies to temporary differences that arise from the elimination of profits and losses resulting from intragroup transactions If the unrealised profit relates to sales made by Bells Ltd, then no adjustments are necessary when calculating non controlling interests in Torquay Ltd If unrealised profit relates to a sale of the plant made by Torquay Ltd then adjustments will be necessary when calculating non controlling interests in Torquay Ltd Required Prepare consolidated financial statements of Bells Ltd and its controlled entity for the reporting period ending 30 June 2018 in MS Excel (Follow the formats of the templates provided (Template A E) to prepare consolidated financial statements in MS Excel To prepare the above specified financial statements, you will be required to Prepare the required journal entries (including tax affected accounts and shareholder's funds) To be recorded in the space provided in this document To eliminate Bells Ltd 's investment in Torquay Ltd at the acquisition date Toeliminate intercompany sales because, from the perspective of the economic entity, the sales did not involve external parties This will ensure that we do not overstate the total sales of the economic entity To eliminate unrealised profit in closing inventory For consideration of the tax paid or payable on the sale of inventory that is still held within the group For sale of inventory from Bell ltd To Torquay Ltd Elimination of unrealised profit in closing inventory For consideration of the tax paid or payable on the sale of inventory that is still held within the group For unrealised profit in opening inventory For reversal of profit recognised on the sale of asset and reinstatement of cost and accumulated depreciation For tax implications of the intragroup sale of the plant To reinstate accumulated depreciation in the statement of financial position For consideration of the tax effect of the reduction in depreciation expense For impairment of goodwill For elimination of intragroup transactionsmanagement fees Dividends paid Dividends declared Dividends receivable The non controlling interests on the acquisition date The non controlling interest in movements in contributed equity and reserves between the date of the parent entity's acquisition and the beginning of the current reporting period The non controlling interest in the current period's profit, as well as movements in reserves in the current period In determining the non controlling interest's share of current period profit or loss, gains and losses of the subsidiary that are unrealised from the economic entity's perspective will need to be adjusted for Dividends paid by Torquay Ltd Calculate non controlling interest and prepare journal entries for the following Transfer the above consolidation journal entries to the consolidation worksheet (Template A) Prepare the consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2018 (Template B) Consolidated statement of changes in equity for the year ended 30 June 2018 for Bells Ltd and its controlled entity for Bells Ltd and its controlled entity (Template C) Statement of changes in equity for the year ended 30 June 2018 for Bells ltd (Template D) Consolidated statement of financial position at 30 June 2018 for Bells Ltd and its controlled entity (Template E) When preparing the above specified statements, make sure that you Record data in financial statements by following accounting standards AASB 10, Consolidated Financial Statements AASB 116 Property, Plant and Equipment AASB 136 Impairment of Assets AASB 13 Fair Value Measurement AASB 102 Inventories Code, classify and check data for accuracy and reliability in accordance with organisational policy, procedures Identify and record the effects of taxation Ensure the structure and format of reports are clear and conform to statutory requirements and organisational procedures Ensure that the financial statements are error free Transfer the data into MS Excel Use the format of templates provided You must attach the spreadsheet with this assessment task Space for journal entries to be performed Particulars Debit Credit a) Eliminate Bells Ltd 's investment in Torquay Ltd at the acquisition date Share Capital Torquay Ltd $1,500,000 Retained Earnings Torquay Ltd $700,000 Goodwill $200,000 Investment in Torquay Ltd $2,000,000 Non Controlling Interest $400,000 b) Eliminate intercompany sales because from perspective of the economic entity the sales did not involve external parties 1 Sales from Bells Ltd to Torquay Ltd Sales Revenue $30,000 Cost of Goods Sold $22,000 Inventory (unrealised profit from on inventory) $8,000 2 Sales from Torquay ltd to Bells Ltd Sales Revenue $20,000 Cost of Goods Sold $14,000 Inventory (unrealised profit on inventory) $6,000 c) Eliminate unrealised profit in closing inventory 1 Bells Ltd inventory held by Torquay Ltd (50 of $8,000 profit) Cost of Goods Sold $4,000 P Inventory $4,000 P 2 Torquay Ltd inventory held by Bells Ltd (40 of $6,000 profit) Cost of Goods Sold $2,400 P Inventory $2,400 P d) Consideration of tax paid or payable on the sale of inventory still held within the group 1 Bells Ltd 's inventory held by Torquay Ltd Deferred Tax Expense $1,200 P Deferred Tax Liability $1,200 P 2 Torquay Ltd 's inventory held by Bells Ltd Deferred Tax Expense $720 P Deferred Tax Liability $720 P e) Sale of inventory from Bells Ltd to Torquay Ltd Already covered in steps b and c Sub2 See b 1 f) Eliminate unrealised profit in closing inventory Already covered in step c g) Consideration of the tax paid or payable on the sale of inventory that is still held within the group Already covered in the step d h) Unrealised profit in opening inventory 1 Bells Ltd 's inventory held by Torquay Ltd from prior year Retained Earnings $1,600 Inventory $1,600 2 Torquay Ltd 's inventory held by Bells Ltd 's from prior year Retained Earnings $800 Inventory $800 i) Reversal of profit recognised on the sale of asset and reinstatement of cost and accumulated depreciation Accumulated depreciation $25,000 Gain on Sale of Plant $20,000 P Plant $45,000 j) Tax implications of the intragroup sale of the plant Deferred Tax Expense $6,000 P Deferred Tax Liability $6,000 P k) Reinstatement of accumulated depreciation in the statement of financial position Depreciation Expense $4,500 Accumulated Depreciation $4,500 l) Consideration of the tax effect of the reduction in depreciation expense Deferred Tax Expense $1,350 Deferred Tax Liability $1,350 m) Impairment of goodwill Impairment Loss $12,000 P Goodwill $12,000 n) Elimination of Intercompany Transactions Management Fees Other Revenue $10,000 P Other Expenses $10,000 P o) Dividends paid 1 Bells Ltd Retained Earnings $160,000 Cash $160,000 2 Torquay Ltd Retained Earnings $30,000 Cash $30,000 p) Dividends declared 1 Bells Ltd Retained Earnings $40,000 Dividends Payable $40,000 2 Torquay Ltd Retained Earnings $10,000 Dividends Payable $10,000 q) Dividend receivable 1 Torquay Ltd Dividends Receivable $8,000 P Dividend Income $8,000 P Depreciation Adjustment Depreciation Expense $2,000 Accumulated Depreciation $2,000 r) Non Controlling interests on the acquisition date Share Capital (Torquay Ltd) $300,000 P Retained Earnings (Torquay Ltd) $140,000 P Non Controlling Interest $440,000 s) The non controlling interest in movements in contributed equity and reserves between the date of the parent entity's acquisition and the beginning of the current reporting period Retained Earnings $20,000 Non Controlling Interest $20,000 t) The non controlling interest in the current period's profit as well as movement in reserves in the current period 1 Current period profit Retained Earnings $3,000 Non Controlling Interest $3,000 2 Current Period's Profit Share Profit or Loss $11,000 Non Controlling Interest $11,000 3 Impairment of Goodwill Non Controlling Interest $2,400 Goodwill $2,400 u) Dividends paid by Torquay Ltd Non Controlling Interest $6,000 Dividends Payable $6,000 P Template A Consolidation worksheet Eliminations and adjustments Bells Ltd ($000) Torquay Ltd ($000) Dr ($000) Cr ($000) Consolidated statements ($000) A detailed reconciliation of opening and closing retained earnings Sales revenue 480 115 50 545 Cost of goods sold 100 40 6 4 0 146 4 Other expenses 80 15 10 0 85 Other Income 70 25 0 10 85 Profit before tax 370 85 66 4 388 6 Tax expense 60 30 90 Profit for the year 310 55 66 4 298 6 Non controlling interest in earnings 11 11 Retained earnings30 June 2017 1000 800 2 48 20 1,822 48 Dividends paid 160 30 6 196 Dividend declared 40 10 50 Retained earnings30 June 2018 1,110 815 2 48 3 1,932 48 Statement of financial position Shareholders' equity Share capital 4,000 1,500 1,500 4,000 Retained earnings b d 1,640 800 3 2,437 Non controlling interest 462 6 462 6 Current liabilities Accounts payable 20 30 50 Dividends payable 40 10 8 42 Non current liabilities Loans 600 250 850 Total of liabilities and equity 5,770 2,605 8,375 Current assets Cash 150 25 175 Accounts receivable 242 175 417 Dividends receivable 8 8 Inventory 500 300 12 4 787 6 Land 1,400 1,105 2,505 Plant 1,870 1,300 0 45 3,169 55 Accumulated depreciation 400 300 4 5 704 5 Investment in Torquay Ltd 2,000 2,000 Total assets 5,770 2,605 8,375 Template B Consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2018 Group Bells Ltd Revenue 545 480 Cost of goods sold 146 4 100 Gross profit 398 6 380 Other Income 85 70 Other expenses 85 80 Profit before tax 398 6 370 Income tax expense 90 60 Profit for the year 308 6 310 Other comprehensive income Total comprehensive income 308 6 310 Profit attributable to Owners of the parent 298 6 310 Non controlling interest 11 Total comprehensive income attributable to Owners of the parent 298 6 310 Non controlling interest 11 Template C Consolidated statement of changes in stakeholder equity for the year ended 30 June 2018 Attributable to owners of the parent Share capital ($) Retained earnings ($) Total ($) Non controlling interest ($) Total equity ($) Balance at 1 July 2017 4,000 1,640 5,640 460 6,100 Total comprehensive income for the year 298 6 298 6 11 309 6 Dividends 200 200 6 206 Balance at 30 June 2018 4,000 1,738 6 5,738 6 465 6,203 6 Template D Statement of changes in equity for the year ended 30 June 2018 Share capital ($) Retained earnings ($) Total equity ($) Balance at 1 July 2017 4,000 1,000 5,000 Total comprehensive income for the year 310 310 Distributions 200 200 Balance at 30 June 2018 4,000 1,110 5,110 Template E Consolidated statement of financial position at 30 June 2018 for Bells Ltd and its controlled entity Group ($0) Bells Ltd ($0) Consolidated statement of financial position Current assets Inventory 787 6 500 Accounts receivable 417 242 Dividend receivable 8 Cash 175 150 Total current assets 1,379 6 900 Non current assets Land 2,505 1,400 Plant 3,169 55 1,870 Accumulated depreciation 704 5 400 Goodwill 176 200 Accumulated impairment loss 24 24 Investment in Torquay Ltd 2000 Deferred tax asset Total non current assets 5,122 05 5,046 Total assets 6,501 65 5,946 Current liabilities Accounts payable 50 20 Dividends payable 40 40 Total current liabilities 90 60 Non current liabilities Loans 850 600 Total non current liabilities 850 600 Total liabilities 940 660 Net assets 5,561 65 5,286 Equity Share capital 4,000 4,000 Retained earnings 1,738 6 1,110 Non controlling interest 462 6 Total equity 6,201 2 5,110 The highlighted amounts are affected by the earlier journal entries Please revise them after updating the journal entries

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Question: Case study: Hi, could you please have a look at my journal entry table and figure out the correct figures and where am I wrong?

Case study:

Hi, could you please have a look at my journal entry table and figure out the correct figures and where am I wrong? All italic, bolded, underline and question mark figures on the right and the text on the left hand side below are wrong and affecting all below Templates from A to E. Could you please use your knowlege to correct my mistakes and accordingly change figures on Templates A to E? thank you so much :)

Share capital	$1 500 000
Retained earnings	$700 000
	$2 200 000

As of 30 June 2018 (that is, two years after the date of the acquisition) the financial statements of the two companies are as follows:

	Bells Ltd ($000)	Torquay Ltd ($000)
A detailed reconciliation of opening and closing retained earnings
Sales revenue	480	115
Cost of goods sold	(100)	(40)
Other expenses	(80)	(15)
Other revenue	70	25
Profit before tax	370	85
Tax expense	60	30
Profit for the year	310	55
Retained earnings30 June 2017	1 000	800
	1 310	855
Dividends paid	(160)	(30)
Dividend declared	(40)	(10)
Retained earnings30 June 2018	1 110	815

Statement of financial position
Shareholders' equity
Retained earnings	1 110	815
Share capital	4 000	1 500
Current liabilities
Accounts payable	20	30
Dividends payable	40	10
Non-current liabilities
Loans	600	250
Total of liabilities and equity	5 770	2 605
Current assets
Cash	150	25
Accounts receivable	242	175
Dividends receivable	8	-
Inventory	500	300
Non-current assets
Land	1400	1105
Plant	1870	1300
Accumulated depreciation	(400)	(300)
Investment in Torquay Ltd	2 000	-
Total assets	5 770	2 605

Other information:

The management of Bells Ltd values any non-controlling interest in Torquay Ltd at fair value.
During the current financial year, Torquay Ltd pays management fees of $10 000 to Bells Ltd. This item is included in 'other' expenses and income.
During the current financial year, Bells Ltd sold inventory to Torquay Ltd at a price of $30 000. The inventory cost Bells $22 000 to produce. Fifty per cent of this inventory is still on hand with Torquay Ltd at the end of the financial year. (Hint: as this unrealised profit relates to sales made by Bells Ltd then no adjustments are necessary when calculating non-controlling interests in Torquay Ltd.)
During the current financial year, Torquay Ltd sold inventory to Bells Ltd at a price of $20 000. The inventory cost Torquay Ltd $14 000 to produce. Forty per cent of this inventory is still on hand with Bells Ltd at the end of the financial year. (Hint: as this unrealised profit relates to sales made by Torquay Ltd then adjustments will be necessary when calculating non-controlling interests in Torquay Ltd.)
In the preceding financial year, Torquay Ltd sold inventory to Bells Ltd at a price of $11 000. The inventory cost Torquay Ltd $8000 to produce. At 30 June 2017, 20 per cent of this inventory was still held by Bells Ltd. (Hint: this information will be used to make an adjustment to non-controlling interests in Torquay Ltd.)
The management of Bells Ltd believes that goodwill acquired has subsequently been impaired. It was impaired by $12 000 in the year to 30 June 2017, and by a further $12 000 in the year to 30 June 2018. (Hint: because the non-controlling interest in Torquay is being valued at fair value, then this will mean that the non-controlling interest will incorporate a proportional share of goodwill. Therefore, any impairment in goodwill will impact the non-controlling interest in Torquay Ltd.)
On 1 July 2017 Torquay Ltd sold an item of plant to Bells Ltd for a price of $45 000 when its carrying amount in Torquay Ltd.'s accounts were $25 000 (cost $50 000, accumulated depreciation $25 000). This item of the plant was being depreciated over a further 10 years, with no expected residual value. (Hint: as this unrealised profit relates to a sale of plant made by Torquay Ltd then adjustments will be necessary when calculating non-controlling interests in Torquay Ltd.)
On 30 June 2018, the directors of Torquay Ltd declared and communicated to their shareholders that they would pay a final dividend amounting to $10 000. (Hint: dividends paid by Torquay will act to reduce the non-controlling interest in Torquay.)

Bells ltd. policy and procedures

The organisation has the following policies and procedures to consolidate the financial accounts:

Uniform Accounting Policies

Bells Ltd. shall prepare consolidated financial statements using uniform accounting policies for like transactions andother events in similar circumstances.

Consolidation of an investee shall begin from the date the investor obtains control of the investee and cease when the investor loses control of the investee. Changes in a parent's ownership interest in a subsidiary that do notresult in the parent losing control of the subsidiary areequity transactions (i.e. transactions with owners in their capacity as owners).

Non-Controlling Interests

Bells ltd. shall present non-controlling interests in the consolidated statement of financial position within equity, separately from the equity of the owners of the parent.

Loss of Control

If Bells Ltd. loses control of a subsidiary, the parent:

derecognises the assets and liabilities of the former subsidiary from the consolidated statement of financial position;
recognises any investment retained in the former subsidiary at its fair value when control is lost and subsequently accounts for it and for any amounts owed by or to the former subsidiary in accordance withrelevant IFRSs; and
recognises the gain or loss associated with the loss of control attributable to the former controlling interest.

Conversions and Consolidation procedures

Conversion procedures:

In case if the transaction happens in a foreign currency, the organisation uses the current rates of transactions.

Consolidated financial statements:

combine like items of assets, liabilities, equity, income, expenses and cash flows of the parent with those of its subsidiaries;

eliminate the carrying amount of the parent's investment in each subsidiary and the parent's portion of equity of each subsidiary;

and eliminate in full intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between entities of the group (profits or losses resulting from intragroup transactions that are recognised in assets, such as inventory and fixed assets, are eliminated in full). Intragroup losses may indicate an impairment that requires recognition in the consolidated financial statements. AASB 112 Income Taxes applies to temporary differences that arise from the elimination of profits and losses resulting from intragroup transactions.

If the unrealised profit relates to sales made by Bells Ltd, then no adjustments are necessary when calculating non-controlling interests in Torquay Ltd.

If unrealised profit relates to a sale of the plant made by Torquay Ltd then adjustments will be necessary when calculating non-controlling interests in Torquay Ltd.

Required

Prepare consolidated financial statements of Bells Ltd and its controlled entity for the reporting period ending 30 June 2018 in MS-Excel. (Follow the formats of the templates provided (Template A-E) to prepare consolidated financial statements in MS Excel.

To prepare the above specified financial statements, you will be required to:

Prepare the required journal entries: (including tax affected accounts and shareholder's funds) To be recorded in the space provided in this document.
To eliminate Bells Ltd.'s investment in Torquay Ltd at the acquisition date.
Toeliminate intercompany sales because, from the perspective of the economic entity, the sales did not involve external parties. This will ensure that we do not overstate the total sales of the economic entity.
To eliminate unrealised profit in closing inventory.
For consideration of the tax paid or payable on the sale of inventory that is still held within the group
For sale of inventory from Bell ltd. To Torquay Ltd.
Elimination of unrealised profit in closing inventory.
For consideration of the tax paid or payable on the sale of inventory that is still held within the group
For unrealised profit in opening inventory
For reversal of profit recognised on the sale of asset and reinstatement of cost and accumulated depreciation
For tax implications of the intragroup sale of the plant.
To reinstate accumulated depreciation in the statement of financial position
For consideration of the tax effect of the reduction in depreciation expense.
For impairment of goodwill
For elimination of intragroup transactionsmanagement fees
Dividends paid
Dividends declared
Dividends receivable
The non-controlling interests on the acquisition date.
The non-controlling interest in movements in contributed equity and reserves between the date of the parent entity's acquisition and the beginning of the current reporting period.
The non-controlling interest in the current period's profit, as well as movements in reserves in the current period. In determining the non-controlling interest's share of current period profit or loss, gains and losses of the subsidiary that are unrealised from the economic entity's perspective will need to be adjusted for.
Dividends paid by Torquay Ltd
Calculate non-controlling interest and prepare journal entries for the following:
Transfer the above consolidation journal entries to the consolidation worksheet. (Template A)
Prepare the consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2018. (Template B)
Consolidated statement of changes in equity for the year ended 30 June 2018 for Bells Ltd and its controlled entity for Bells Ltd and its controlled entity. (Template C)
Statement of changes in equity for the year ended 30 June 2018 for Bells ltd. (Template D)
Consolidated statement of financial position at 30 June 2018 for Bells Ltd and its controlled entity. (Template E)

When preparing the above-specified statements, make sure that you:

Record data in financial statements by following accounting standards:

AASB 10, Consolidated Financial Statements
AASB 116 Property, Plant and Equipment
AASB 136 Impairment of Assets
AASB 13 Fair Value Measurement
AASB 102 Inventories

Code, classify and check data for accuracy and reliability in accordance with organisational policy, procedures.
Identify and record the effects of taxation
Ensure the structure and format of reports are clear and conform to statutory requirements and organisational procedures.
Ensure that the financial statements are error-free.
Transfer the data into MS Excel. Use the format of templates provided.

You must attach the spreadsheet with this assessment task.

Space for journal entries to be performed.

Particulars	Debit	Credit
a) Eliminate Bells Ltd.'s investment in Torquay Ltd at the acquisition date
Share Capital-Torquay Ltd	$1,500,000?
Retained Earnings-Torquay Ltd	$700,000?
Goodwill	$200,000?
Investment in Torquay Ltd		$2,000,000
Non-Controlling Interest?		$400,000?

b) Eliminate intercompany sales because from perspective of the economic entity the sales did not involve external parties
1. Sales from Bells Ltd to Torquay Ltd
Sales Revenue	$30,000?
Cost of Goods Sold		$22,000?
Inventory (unrealised profit from on inventory) ?		$8,000?
2. Sales from Torquay ltd to Bells Ltd
Sales Revenue	$20,000
Cost of Goods Sold		$14,000?
Inventory (unrealised profit on inventory)?		$6,000?

c) Eliminate unrealised profit in closing inventory
1. Bells Ltd inventory held by Torquay Ltd (50% of $8,000 profit)
Cost of Goods Sold	$4,000P
Inventory		$4,000P
2. Torquay Ltd inventory held by Bells Ltd (40% of $6,000 profit)
Cost of Goods Sold	$2,400P
Inventory		$2,400P

d) Consideration of tax paid or payable on the sale of inventory still held within the group
1. Bells Ltd.'s inventory held by Torquay Ltd
Deferred Tax Expense	$1,200P
Deferred Tax Liability		$1,200P
2. Torquay Ltd.'s inventory held by Bells Ltd
Deferred Tax Expense	$720P
Deferred Tax Liability		$720P

e) Sale of inventory from Bells Ltd to Torquay Ltd_Already covered in steps b and c
Sub2: See b 1
f) Eliminate unrealised profit in closing inventory_Already covered in step c

g) Consideration of the tax paid or payable on the sale of inventory that is still held within the group_Already covered in the step d

h) Unrealised profit in opening inventory
1. Bells Ltd.'s inventory held by Torquay Ltd from prior year
Retained Earnings	$1,600?
Inventory		$1,600?
2. Torquay Ltd.'s inventory held by Bells Ltd.'s from prior year
Retained Earnings	$800?
Inventory		$800?

i) Reversal of profit recognised on the sale of asset and reinstatement of cost and accumulated depreciation
Accumulated depreciation	$25,000?	?
Gain on Sale of Plant	$20,000P
Plant	?	$45,000?

j) Tax implications of the intragroup sale of the plant
Deferred Tax Expense	$6,000P
Deferred Tax Liability		$6,000P

k) Reinstatement of accumulated depreciation in the statement of financial position
Depreciation Expense	$4,500?
Accumulated Depreciation		$4,500?

l) Consideration of the tax effect of the reduction in depreciation expense
Deferred Tax Expense ?	$1,350?
Deferred Tax Liability?		$1,350?

m) Impairment of goodwill
Impairment Loss	$12,000P
Goodwill		$12,000
?
n) Elimination of Intercompany Transactions
Management Fees:
Other Revenue	$10,000P
Other Expenses		$10,000P

o) Dividends paid
1. Bells Ltd?
Retained Earnings ?	$160,000?
Cash?		$160,000?
2. Torquay Ltd ?
Retained Earnings ?	$30,000?
Cash?		$30,000?

p) Dividends declared
1. Bells Ltd ?
Retained Earnings ?	$40,000?
Dividends Payable ?		$40,000?
2. Torquay Ltd ?
Retained Earnings ?	$10,000?
Dividends Payable ?		$10,000?

q) Dividend receivable
1. Torquay Ltd
Dividends Receivable	$8,000P
Dividend Income		$8,000P

Depreciation Adjustment
Depreciation Expense	$2,000
Accumulated Depreciation		$2,000

r) Non-Controlling interests on the acquisition date
Share Capital (Torquay Ltd)	$300,000P
Retained Earnings (Torquay Ltd)	$140,000P
Non-Controlling Interest		$440,000
?	?
s) The non-controlling interest in movements in contributed equity and reserves between the date of the parent entity's acquisition and the beginning of the current reporting period
Retained Earnings	$20,000?
Non-Controlling Interest		$20,000?

t) The non-controlling interest in the current period's profit as well as movement in reserves in the current period
1. Current period profit
Retained Earnings	$3,000?
Non-Controlling Interest		$3,000?
2. Current Period's Profit Share
Profit or Loss	$11,000?
Non-Controlling Interest		$11,000?
3. Impairment of Goodwill
Non-Controlling Interest	$2,400?
Goodwill		$2,400?

u) Dividends paid by Torquay Ltd
Non-Controlling Interest	$6,000?
Dividends Payable		$6,000P
?		?

Template A: Consolidation worksheet

	Eliminations and adjustments
	Bells Ltd ($000)	Torquay Ltd ($000)	Dr ($000)	Cr ($000)	Consolidated statements ($000)
A detailed reconciliation of opening and closing retained earnings
Sales revenue	480	115	-	50	545

Cost of goods sold	100	40	6.4	0	146.4


Other expenses	80	15	10	0	85

Other Income	70	25	0	10	85


Profit before tax	370	85	-	66.4	388.6
Tax expense	60	30			90


Profit for the year	310	55		66.4	298.6
Non-controlling interest in earnings			-	11	11
Retained earnings30 June 2017	1000	800	2.48	20	1,822.48

Dividends paid	160	30	6	-	196

Dividend declared	40	10	-	-	50

Retained earnings30 June 2018	1,110	815	2.48	3	1,932.48
Statement of financial position
Shareholders' equity
Share capital	4,000	1,500	-	1,500	4,000

Retained earnings b/d	1,640	800	-	3	2,437

Non-controlling interest				462.6	462.6

Current liabilities
Accounts payable	20	30			50
Dividends payable	40	10		8	42
Non-current liabilities
Loans	600	250			850
Total of liabilities and equity	5,770	2,605			8,375
Current assets
Cash	150	25			175
Accounts receivable	242	175			417
Dividends receivable	8	-	-	8	-
Inventory	500	300	12.4	-	787.6
Land	1,400	1,105			2,505
Plant	1,870	1,300	0.45	-	3,169.55
Accumulated depreciation	400	300	4.5	-	704.5
Investment in Torquay Ltd	2,000	-	-	2,000	-
Total assets	5,770	2,605			8,375

Template B: Consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2018

	Group	Bells Ltd
Revenue	545	480
Cost of goods sold	146.4	100
Gross profit	398.6	380
Other Income	85	70

Other expenses	85	80
Profit before tax	398.6	370
Income tax expense	90	60
Profit for the year	308.6	310
Other comprehensive income	_	_
Total comprehensive income	308.6	310
Profit attributable to:
Owners of the parent	298.6	310
Non-controlling interest	11

Total comprehensive income attributable to:
Owners of the parent	298.6	310
Non-controlling interest	11

Template C: Consolidated statement of changes in stakeholder equity for the year ended 30 June 2018

Attributable to owners of the parent
	Share capital ($)	Retained earnings ($)	Total ($)	Non-controlling interest ($)	Total equity ($)
Balance at 1 July 2017	4,000	1,640	5,640	460	6,100
Total comprehensive income for the year	-	298.6	298.6	11	309.6
Dividends	-	200	200	6	206

Balance at 30 June 2018	4,000	1,738.6	5,738.6	465	6,203.6

Template D: Statement of changes in equity for the year ended 30 June 2018

	Share capital ($)	Retained earnings ($)	Total equity ($)
Balance at 1 July 2017	4,000	1,000	5,000
Total comprehensive income for the year	-	310	310
Distributions	-	200	200

Balance at 30 June 2018	4,000	1,110	5,110

Template E: Consolidated statement of financial position at 30 June 2018 for Bells Ltd and its controlled entity

	Group ($0)	Bells Ltd ($0)
Consolidated statement of financial position
Current assets
Inventory	787.6	500
Accounts receivable	417	242
Dividend receivable	-	8
Cash	175	150
Total current assets	1,379.6	900
Non-current assets
Land	2,505	1,400
Plant	3,169.55	1,870
Accumulated depreciation	704.5	400
Goodwill	176	200
Accumulated impairment loss	24	24
Investment in Torquay Ltd	-	2000
Deferred tax asset		-
Total non-current assets	5,122.05	5,046
Total assets	6,501.65	5,946
Current liabilities
Accounts payable	50	20
Dividends payable	40	40
Total current liabilities	90	60
Non-current liabilities
Loans	850	600
Total non-current liabilities	850	600
Total liabilities	940	660
Net assets	5,561.65	5,286
Equity
Share capital	4,000	4,000
Retained earnings	1,738.6	1,110

Non-controlling interest	462.6	-
Total equity	6,201.2	5,110

The highlighted amounts are affected by the earlier journal entries. Please revise them after updating the journal entries.

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