Question - Using the above information:

1. Prepare the acquisition analysis on the day of acquisition.
2. Record the consolidated journal entries necessary to prepare consolidated accounts for the year ending 30/06/2023 for the group comprising Sforzando Ltd and Fortepiano Ltd.
3. Complete the consolidated worksheet for the year-ending - Entering the consolidated journal entries in above part to the appropriate debit and credit columns in the Consolidated Worksheet; and - Clearly labeling the references for each of the adjustments in the Consolidated Worksheet; and - Completing the Group figures in the Consolidated Worksheet

Part A - Consolidation Question On 01/07/2021, Sforzando Ltd acquired 100% of the issued shares of Fortepiano Ltd for: At the date of acquisition, the Owners' Equity of Fortepiano Ltd consisted of: Share capital General Reserve Retained earnings The accounts of the two companies appear as at 30/06/2023 are as follows: Sales less Cost of Goods Sold Depreciation expense Interest expense Other expenses Other Income plus Interest revenue Dividend revenue less Income tax expense Net Profit after Tax Retained earnings (01/07/2022) Available for appropriation Interim dividend paid Final dividend declared Retained earnings (30/06/2023) Share Capital General Reserve Total Owner's Equity Loan payable (due 30/06/2025) Dividend payable Deferred Tax Liability Other liabilities Total Liabilities Total Liabilities \& Owner's Equity Assets Dividend receivable Inventory Property, Plant \& Equipment Accumulated depreciation Land Investment in Fortepiano Ltd Loan receivable Other assets Total Assets $3,640,000 $1,638,000 $409,500 $307,080 $2,354,580 Eortepiano Lttd $ 5,824,000 $ 2,935,200 1,907,800 146,700 57,330 124,570 85,900 318,500 499,200 1,164,800 1,747,200 2,912,000 273,000 455,000 2,184,000 4,732,000 364,000 1,638,000 409,500 2,730,000 136,500 182,000 682,500 7,280,000 0 455,000 546,000 819,000 1,820,000 546,000 182,000 45,500 136,500 910,000 3,640,000 9,100,000 0 218,400 1,456,000 291,200 1,456,000 1,547,000 0 546,000 0 436,800 800,800 9,100,000 3,640,000 Additional information: (a) At date of acquisition, all identifiable net assets of Fortepiano Ltd were recorded at fair value, with the exception of a item of Machinery in the books of Fortepiano Ltd. The item of Machinery had cost of $1,092,000, and an accumulated depreciation of $218,400. The management of Sforzando Ltd believed the item of Machinery had a fair value of $1,310,400 and a remaining useful life of 5 years. (b) The directors apply the impairment test for goodwill annually. As at 30/06/2023, the cumulative goodwill impairment write-downs for prior years totalled $906,000. During the current year, the goodwill has further been impaired by another $13,590. (c) An item of Equipment owned by Fortepiano Ltd was sold to Sforzando Ltd on 01/01/2022 for $173,555. The cost of the Equipment was $145,600 and its accumulated depreciation was $29,120 at the time of trasnfer. Sforzando Ltd estimated this item had an annual depreciation rate of 10% with no residual value. (d) The opening inventory of Sforzando Ltd includes unrealised profit of $382,000 on inventory transferred from Fortepiano Ltd during the prior financial year. All of this inventory was sold by Sforzando Ltd to parties external to the Group by 30/06/2023. (e) During the financial year ending on 30/06/2023, Sforzando Ltd purchased inventory from Fortepiano Ltd for $1,656,000. This inventory had previously cost Fortepiano Ltd $662,000. By 30/06/2023, 45\% of this inventory was sold to outsiders by Sforzando Ltd. (f) Fortepiano Ltd borrowed a loan from Sforzando Ltd amounting to $546,000 at the start of the current period. On 30/06/2023, Fortepiano Ltd paid the annual interest for the intra group loan at a rate of 10.50%. (g) During the current year, Sforzando Ltd paid Arina Ltd, an external party for management fees expense amouning to $2,000 (i) The tax rate is: Part A - Consolidation Question On 01/07/2021, Sforzando Ltd acquired 100% of the issued shares of Fortepiano Ltd for: At the date of acquisition, the Owners' Equity of Fortepiano Ltd consisted of: Share capital General Reserve Retained earnings The accounts of the two companies appear as at 30/06/2023 are as follows: Sales less Cost of Goods Sold Depreciation expense Interest expense Other expenses Other Income plus Interest revenue Dividend revenue less Income tax expense Net Profit after Tax Retained earnings (01/07/2022) Available for appropriation Interim dividend paid Final dividend declared Retained earnings (30/06/2023) Share Capital General Reserve Total Owner's Equity Loan payable (due 30/06/2025) Dividend payable Deferred Tax Liability Other liabilities Total Liabilities Total Liabilities \& Owner's Equity Assets Dividend receivable Inventory Property, Plant \& Equipment Accumulated depreciation Land Investment in Fortepiano Ltd Loan receivable Other assets Total Assets $3,640,000 $1,638,000 $409,500 $307,080 $2,354,580 Eortepiano Lttd $ 5,824,000 $ 2,935,200 1,907,800 146,700 57,330 124,570 85,900 318,500 499,200 1,164,800 1,747,200 2,912,000 273,000 455,000 2,184,000 4,732,000 364,000 1,638,000 409,500 2,730,000 136,500 182,000 682,500 7,280,000 0 455,000 546,000 819,000 1,820,000 546,000 182,000 45,500 136,500 910,000 3,640,000 9,100,000 0 218,400 1,456,000 291,200 1,456,000 1,547,000 0 546,000 0 436,800 800,800 9,100,000 3,640,000 Additional information: (a) At date of acquisition, all identifiable net assets of Fortepiano Ltd were recorded at fair value, with the exception of a item of Machinery in the books of Fortepiano Ltd. The item of Machinery had cost of $1,092,000, and an accumulated depreciation of $218,400. The management of Sforzando Ltd believed the item of Machinery had a fair value of $1,310,400 and a remaining useful life of 5 years. (b) The directors apply the impairment test for goodwill annually. As at 30/06/2023, the cumulative goodwill impairment write-downs for prior years totalled $906,000. During the current year, the goodwill has further been impaired by another $13,590. (c) An item of Equipment owned by Fortepiano Ltd was sold to Sforzando Ltd on 01/01/2022 for $173,555. The cost of the Equipment was $145,600 and its accumulated depreciation was $29,120 at the time of trasnfer. Sforzando Ltd estimated this item had an annual depreciation rate of 10% with no residual value. (d) The opening inventory of Sforzando Ltd includes unrealised profit of $382,000 on inventory transferred from Fortepiano Ltd during the prior financial year. All of this inventory was sold by Sforzando Ltd to parties external to the Group by 30/06/2023. (e) During the financial year ending on 30/06/2023, Sforzando Ltd purchased inventory from Fortepiano Ltd for $1,656,000. This inventory had previously cost Fortepiano Ltd $662,000. By 30/06/2023, 45\% of this inventory was sold to outsiders by Sforzando Ltd. (f) Fortepiano Ltd borrowed a loan from Sforzando Ltd amounting to $546,000 at the start of the current period. On 30/06/2023, Fortepiano Ltd paid the annual interest for the intra group loan at a rate of 10.50%. (g) During the current year, Sforzando Ltd paid Arina Ltd, an external party for management fees expense amouning to $2,000 (i) The tax rate is