Part A covers Consolidations concepts. Part B covers practical demonstration of annual report on corporate combinations. Through this assignment, students will gain practical skills in preparing consolidated financial statement & explore consolidated reporting by analysing financial statements of Lion & Pioneer and Westpac Banking group.

Part A:

Lion Ltd owns $100$ per cent of the shares of Pioneer Ltd$,$ acquired on $1$ July $2022$ for $$3\mathrm{.}5$ million when the shareholders$$ funds of Pioneer Ltd were:

$

Share capital $1,750,000$

Retained earnings $1,400,000$

$3,150,000$

All assets of Pioneer Ltd are fairly stated at acquisition date. The directors believe that there has been an impairment loss on the goodwill of $$35,000$ for the year ended $30$ June $2023.$

During the $2023$ financial year, Pioneer Ltd sells inventory to Lion Ltd at a sale price of $$700,000.$ The inventory cost Pioneer Ltd $$420,000$ to produce. At $30$ June $2023,$ half of the inventory is still on hand with Lion Ltd$.$ The tax rate is $33$ per cent.

The financial statements of Lion Ltd and Pioneer Ltd at $30$ June $2023$ are as follows:RECONCILIATION OF OPENING AND CLOSING RETAINED EARNINGS

STATEMENT OF FINANCIAL POSITION

REQUIRED:

Prepare the consolidated financial statements in Microsoft Word file for Lion Ltd and its

controlled entity for $2023.$ You should include following calculations:

a$.$ Reconciliation of opening and closing retained earnings for Lion and Pioneer Ltd$,$

including elimination and adjusting calculation as well as consolidation calculations.

Show the related journal entries.

b$.$ Consolidated statement of financial position of Lion Ltd and its controlled entities

as at $30$ June $2023.$

c$.$ Consolidated statement of profit or loss and other comprehensive income of Lion Ltd

and its controlled entities for the year ended $30$ June $2023.$

d$.$ Consolidated statement of changes in equity for the year ended $30$ June $2023.$