Why does AASB 3 provide a choice in how to measure non-controlling interests? Question Two The following financial statements of Alberta Ltd and its subsidiary Anderson Ltd have been extracted from their financial records on 30 June 2023. Alberta Ltd ($) Anderson Ltd ($) Detailed reconciliation of opening and closing retained earnings Sales revenue 1 725 000 1 450 000 Cost of goods sold (1 160 000) (595 000) Gross profit 565 000 855 000 Dividend revenuefrom Anderson Ltd 186 000 - Management fee revenue 66 250 - Profit on sale of plant 87 500 - Expenses Administrative expenses (77 000) (96 750) Depreciation (61 250) (142 000) Management fee expense - (66 250) Other expenses (252 750) (192 500) Profit before tax 513 750 357 500 Tax expense (153 750) (105 500) Profit for the year 360 000 252 000 Retained earnings1 July 2022 798 500 598 000 1 158 500 850 000 Dividends paid (343 500) (232 500) Retained earnings30 June 2023 815 000 617 500 Statement of financial position Shareholders' equity Retained earnings 815 000 617 500 Share capital 875 000 500 000 Current liabilities Accounts payable 136 750 115 750 Tax payable 103 250 62 500 Non-current liabilities Loans 433 750 290 000 2 363 750 1 585 750 Current assets Accounts receivable 148 500 155 750 Inventory 230 000 72 500 Non-current assets Land and buildings 560 000 815 000 Plantat cost 749 625 889 500 Accumulated depreciation (214 375) (347 000) Investment in Anderson Ltd 890 000 - 2 363 750 1 585 750 Other information a. Alberta Ltd had acquired its 70 per cent interest in Anderson Ltd on 1 July 2014, that is, nine years earlier. At that date the capital and reserves of Anderson Ltd were: Share capital $600 000 Retained earnings $350 000 $950 000 b. At the date of acquisition all assets were considered to be fairly valued. c. The management of Alberta Ltd measures any non-controlling interest at the proportionate share of Anderson Ltd's identifiable net assets. d. During the year, Alberta Ltd made total sales to Anderson Ltd of $162 500, while Anderson Ltd sold $130 000 in inventory to Alberta Ltd. e. The opening inventory in Alberta Ltd as at 1 July 2022 included inventory acquired from Anderson Ltd of $105 000 that had cost Anderson Ltd $87 500 to produce. f. The closing inventory in Alberta Ltd includes inventory acquired from Anderson Ltd at a cost of $84 000. This had cost Anderson Ltd $70 000 to produce. g. The closing inventory of Anderson Ltd includes inventory acquired from Alberta Ltd at a cost of $30 000. This had cost Alberta Ltd $24 000 to produce. h. The management of Alberta Ltd believe that goodwill acquired was impaired by $7500 in the current financial year. Previous impairments of goodwill amounted to $56 250. i. On 1 July 2022 Alberta Ltd sold an item of plant to Anderson Ltd for $290 000 when its carrying value in Alberta Ltd's accounts was $202 500 (cost of $337 500, accumulated depreciation of $135 000). This plant is assessed as having a remaining useful life of six years. j. Anderson Ltd paid $66 250 in management fees to Alberta Ltd. k. The tax rate is 30 per cent. REQUIRED 1. Prepare necessary consolidation journal entries for Alberta Ltd and its controlled entity as at 30 June 2023 as at 30 June 2023. 2. Post the journal entries to the consolidation worksheet Alberta Ltd and its controlled entity as at 30 June 2023. 3. Prepare the consolidated statement of financial position of Alberta Ltd and its controlled entity as at 30 June 2023. 4. Prepare consolidated statement of profit or loss and other comprehensive income of Alberta Ltd and its controlled entity for financial year ended 30 June 2023. 5. Prepare consolidated statement of changes in equity of Alberta Ltd and Anderson Ltd as at 30 June 2023.