On 1 January 2022, Cassie Ltd acquired all the shares of Jasmine Ltd for $262 000 on a cum-div. basis. On this date, the equity and liabilities of Jasmine Ltd included the following balances:

 

Share capital	$115,500
General reserve	$2,000
Retained earnings	$50,000
Dividend Payable	$5,000
Goodwill	$10,000

 At acquisition date, all the identifiable assets and liabilities of Jasmine Ltd were recorded at amounts equal to fair value except for:

	Carrying amount	Fair value
Plant (cost $50,000)	$40,000	$44,000
Patent	20,000	26,000
Inventories	30,000	39,000
Land	50,000	75,000

 The plant had a useful life of 5 years at acquisition date and was expected to be used evenly over that time. Jasmine had not recorded an internally generated brand that Cassie considered to have a fair value of $22,000. The brand was considered to have an indefinite life. The patent had a further 6-year useful life at acquisition date. Any adjustments for differences between carrying amounts at acquisition date and fair values are made on consolidation. Goodwill on acquisition was impaired by $10,000 on 30 June 2022. During the year ended 30 June 2022, all inventories on hand at acquisition date were sold, and the land was sold on 1 June 2023 for $80,000. Any valuation reserves created are transferred on consolidation to retained earnings when assets are sold or fully consumed.

 Additional information 

(a) On 1 May 2022, Jasmine Ltd purchased inventory worth $13 000 from Cassie Ltd. The inventory had previously cost Cassie Ltd $8 000. Half of this inventory was sold externally by 30 June 2022. The remainder was sold externally by 30 June 2023. 

(b) On 30 April 2022, Jasmine Ltd transferred inventory costing $50,000 to Cassie Ltd for $80,000. Cassie Ltd treated this item as plant. The item was still on hand at 30 June 2023. Cassie Ltd applied a 10% depreciation rate to this plant. 

(c) On 1 February 2023, Jasmine Ltd acquired $6,000 inventory from Cassie Ltd at a mark-up of 20% on costs. One-quarter of this inventory has been sold to external parties for $3,000 by 30 June 2023. 

(d) On 1 January 2022, Cassie Ltd sold a motor vehicle to Jasmine Ltd for $48,000. This vehicle had originally cost Cassie Ltd $90 000 and had a carrying amount at the time of sale of $57,000. Both entities charge depreciation at a rate of 20% p.a. 

(e) Cassie Ltd issued 9% Debentures with par value of $100 each on 1 July 2022. Some of these Debentures, worth $20,000, were purchased by Jasmine Ltd. Interest on the Debentures is calculated at 9% p.a. on the loan and the last interest payment was made on 31 March 2023.

 The corporate tax rate is 30%. 

Required: 

. Prepare the acquisition analysis as at 1 January 2022 for Cassie Ltd. 

 . Prepare the consolidation worksheet for Cassie Ltd as at 30 June 2023, using the attached template. 

. Prepare a consolidated statement of financial position using account format, for Cassie Ltd as at 30 June 2023. 

Answer rating: 100% (QA)

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