PART B, QUESTION 4 (2 marks + 8 marks next part)

Sydney Ltd acquired a 82% interest in Brisbane Ltd on 1 July 2014 for $958,000

On the same date, the balance of shareholders equity of Brisbane Ltd comprised:

Share capital	$250,000
General reserve	$99,000
Retained earnings	$143,000
	$492,000

All assets are recorded at their fair values except for an item of plant, which had a fair value of $199,000 and a carrying amount of $145,000 (original cost $417,000). The remaining useful life of the plant at the date of acquisition is 13 years.

The fair value of the NCI in Brisbane Ltd on 1 July 2014 was $316,000.

At 30 June 2016 & 2017 the equity balances of Brisbane Ltd are:

	30/6/16	30/6/17
Share capital	$250,000	$250,000
General reserve	$161,000	$178,000
Retained earnings	$180,000	$197,000

Additional information:

1. Brisbane Ltd recorded a profit after tax of $40,000 for the year ended 30 June 2017 and paid a dividend of $8,000 on 1 January 2017.
2. On 1 June 2016, Brisbane Ltd sold inventory to Sydney Ltd for $120,000, at a profit before tax of $50,000. The entire inventory is unsold at 30 June 2016. The inventory is sold to external parties by Sydney Ltd on 15 June 2017.

Requirements:

1. Compute and enter the amount of adjusted profit after tax (at 30 June 2017) prior to assigning it to NCI share of profit in the answer space below (2 marks)
2. Provide all consolidation entries to record for Sydney Group as well as NCI at 30 June 2017 in next part of the question (8 marks)
3. Provide all your workings or journals in the answer space below.