Case study Part A Assignment instructions: This assignment is to be completed using Excel. Please use a separate sheet within the one file for each assignment part (a), (b) (c) and (d). Please ensure that you use 0 'Ref' column in the worksheet to identify each individual consolidation entry. Case study: On 1 July 2020, Big Ltd acquired all the shares of Ben Ltd on an exdiv. basis. Big Ltd paid $700,000 cash and issued 20,000 shares which had a fair value of $30.00 on acquisition date. On this date, Ben Ltd included the following balances: Share capital $200,000 General reserve 5,000 Retained earnings 45,000 Dividend Payable ex div basis 10,000 Goodwill 3,000 At acquisition date, all the identifiable assets and liabilities of Ben Ltd were recorded at amounts equal to fair value except for: Carrying amount($) Fair value($) Useful life at acquisition date Land 1,200,000 2,000,000 Not applicable Plant and equipment 800,000 950,000 5 years (cost $900,000) Inventories 18,000 28,000 100% sold externally during the year ended 30/6/2021 Any valuation reserves created are transferred on consolidation to retained earnings when assets are sold or fully consumed. Dividends were paid and declared by Ben Ltd during the current financial year. See worksheet. Additional information (a) On 1 July 2021, Ben Ltd has on hand inventory worth $14 000, sold from Big Ltd in June 2021 (prior year). The inventory had previously cost Big Ltd $10 000. This inventory was 100% sold to external parties by 30 June 2022. (b) On 1 January 2022, Ben Ltd sold an item of plant with a carrying amount of $5 000 to Big Ltd for $12 000. Big Ltd treated this item as inventory. The item was still on hand at the end of the year. Ben Ltd applied a 20% depreciation rate to this plant. (c) On 1 March 2022, Big Ltd acquired $18 000 inventory from Ben Ltd. This inventory originally cost $5 000. 10% of this inventory has been sold to external parties for $28,000. (d) On June 2021 Big Ltd gave Ben Ltd a loan of $90 000. Ben Ltd has not made any repayments on the loan. Interest is charged at 9% per annum on the loan and the last interest payment was made on 30 April 2022. Both companies have recorded accruals at year end (see worksheet). The corporate tax rate is 30%. Required: a. Prepare the acquisition analysis as at 1 July 2020 for the Big Ltd Group. (8 marks) b. Prepare the consolidation worksheet entries as at 30 June 2022 for the Big Ltd Group. (45 marks) c. Prepare the consolidation worksheet for the Big Ltd Group as at 30 June 2022, using the attached template. (32 marks) d. Prepare a consolidated Balance sheet using account format, for the Big Ltd Group as at 30 June 2022. Please ensure all sub-headings and sub-totals are included.(15 marks) Round all amounts to 2 decimal places. Consolidated worksheet template: Big Ben Big Ltd Group ($) Ltd ($) Ltd ($) Debit ($) Credit ($) Sales revenue 220,000 212,000 Dividend income 150,000 20,000 Interest income 8,100 378,100 232,000 Cost of sales 162,000 128,000 Interest expense 8,100 Other expenses (including 83,000 71,000 depreciation) Total expenses 245,000 207,100 Trading profit 133,100 24,900 Gains/losses on sale of 22,000 7,000 non-current assets Profit before tax 155,100 31,90 Tax expense 46,530 9,570 Profit after tax 108,570 22,330 3Consolidated worksheet template (continued): Debit (S) U.) _0 O O O U.) U1 'U1 C O I Retained earnings (1/7/21) Transfer from BCVR reserve Dividend paid Dividend declared Retained earnings 30/6/2022 Share ca pital General reserve BCVR Total Equity 1,106,65 Deferred tax liabilities 620.00 522.00 201.32 1,343.32 Total Liabilities + 2,449,983 Equity I3 \"N O O 0 1,35 80,00 1,324,13 90,00 399,50 1,894,983 2,327,313 _ _ _ _ _ _ _ _ _ _ Consolidated worksheet template (continued): Big Ltd Group (5 5.: Ltd (5) 1,300,00 7,80 Ltd (5) Debit (5) Credit (5 Shares in Ben Ltd Cash E on :30 35,00 Inventories N p O O O 80,000 Dividend Receivable Interest Receivable Accounts Receivable Land Plant& equipment Accumulated depreciation Plant Motor vehicle Accumulated depreciation Motor vehicle Office equipment Accum. depreciation office equipment Trademark Goodwill 3,00 32,22 1,200,00 900,00 (100,000) 90,00 (30,000) 3,00 (2,000) 50,00 3,00 Deferred tax assets 320,833 58,088 Loan to Ben Ltd 90,00 Total assets 2,449.98 2,327,313