On 1 July 2019, Inger Ltd purchased all the shares

On 1 July 2019, Inger Ltd purchased all the shares in Joey Ltd for $325,000. At this date, the shareholders’ equity of Joey Ltd consisted of share capital and retained earnings of $200,000 and $70,000 respectively. On acquisition date, all the identifiable assets and liabilities of Joey Ltd were equal to their fair value except for the following assets: Carrying amount Fair value $ $ Land 75,000 87,000 Machine (cost $78,000) 54,000 60,000 Inventory 20,000 28,000 Three quarter of the inventories held on 1 July 2019 was sold by 30 June 2020 and the remaining by 30 June 2021. The Machine has a further 3-year life and is depreciated on a straight-line basis. On 1 January 2020, Inger Ltd sold a motor vehicle to Joey Ltd for $25,000. The carrying amount of the motor vehicle is $20,000 at the time of sale. Both entities depreciate the motor vehicle at 10% using straight line method. On 2 May 2020, Joey Ltd transferred $20,000 from the retained earnings on hand at 1 July 2019 to a general reserve. For the year ended 30 June 2020, the goodwill acquired is to be impaired by $8,000 after an impairment test was carried out. The company income tax rate is 30%. Required: Prepare an acquisition analysis in relation to the acquisition made by Inger Ltd. Prepare all necessary consolidation journal entries for the preparation of the consolidated financial statements for the year ended 30 June 2020. Note: you are not required to prepare a consolidation worksheet, or the consolidated financial statements. 


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