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17 Oct
2020

Prepare the consolidation worksheet entries at 30 June 2020, including journal entries for the Business Combination Valuation Re…

Category:ACADEMICIAN

SOLUTION AT Australian Expert Writers

WORD LIMIT 2000 WORDS (EXCLUDES REFERENCES, DIAGRAMS AND TABLES)
TOPIC – RESEARCH CASE STUDY ON CONSOLIDATED FINANCIAL STATEMENTS AND ASSOCIATED JOURNAL ENTRIES INCLUDING CONSOLIDATED WORKSHEETS.
 
 
 
 
CASE STUDY – BASIL LIMITED and LINDA LIMITED – CONSOLIDATION AND GOODWILL ANALYSIS
On 1 July 2019, BASIL Ltd acquired all the issued shares (ex-div.) of LINDA Ltd for $272 000. At this date the financial statements of Lucky Ltd showed the following balance in its accounts:
Share Capital
$150 000
General Reserve
   40 000
Retained Earnings
   80 000
Dividend Payable
  20 000
Goodwill
  10 000
 
 
At 1 July 2019, all identifiable assets and liabilities of Linda Ltd were recorded at amounts equal to the fair value.
 
 
 
 
 
 
The financial statements of Basil Ltd and Linda Ltd at 30 June 2020 contained the following information:
 
Basil Ltd
$
Linda Ltd
$
Profit for the period
35 000
25 000
Retained earnings (1/7/2019)
90 000
80 000
Transfer form General Reserve

10 000
RETAINED EARNINGS (30/6/2020)
125 000
115 000
Share Capital
700 000
150 000
General Reserve
92 000
30 000
TOTAL EQUITY
917 000
295 000
Provisions
30 000
20 000
Payables
15 000
25 000
Long-term loans
50 000
110 000
TOTAL LIABILITIES
95 000
155 000
TOTAL EQUITY and LIABILITIES
1 012 000
450 000
 
 
 
Plant
600 000
820 000
Accumulated depreciation
(295 000)
(650 000)
Fixtures
300 000
120 000
Accumulated depreciation
(180 000)
(80 000)
Land
200 000
140 000
Brands
50 000
30 000
Shares in Linda Ltd
272 000

Goodwill

10 000
Inventories
45 000
40 000
Cash
5 000
7 000
Receivables
15 000
13 000
TOTAL ASSETS
1 012 000
450 000
 
 
REQUIRED
Prepare the acquisition analysis at 1 July 2019. (8 marks)
Prepare the consolidation worksheet entries at 30 June 2020, including journal entries for the Business Combination Valuation Reserve and Pre-acquisition entries. ( 12 marks)
Prepare the Consolidated Financial Statements for Basil Ltd’s group at 30 June 2020. You may use excel spreadsheet for the worksheets or use word as applicable. (18 marks)
Prepare Consolidated Statement of Profit or Loss and Other Comprehensive Income for the financial year ended 30 June 2020. (5 marks)
Prepare Consolidated Statement of Changes in Equity for the financial year ended 30 June 2020. (7 marks)
Prepare Consolidated Statement of Financial Position as at 30 June 2020. (10 marks)
RUBRIC – MARKING CRITERIA
 
QUESTIONS
CRITERIA
MAXIMUM MARKS
INDIVIDUAL MARKS
1.       Acquisition analysis
Full calculations including goodwill
8
 
2.       Business Combination and pre-acquisition entries
Journal entries and supporting discussion and analysis
12
 
3.       Consolidated worksheet for the Group
Excel or Table format for the group including adjustments and Group Consolidation with supporting analysis
18
 
4.       Consolidated Statement of Profit or Loss and other Comprehensive Income
Preparation of Consolidated Statement of Profit and Loss and other Income
5
 
5.       Consolidated Statement of Changes in Equity
Preparation of Consolidated Statement in Equity
7
 
6.       Consolidated Statement of Financial Position
Preparation of Consolidated Statement of Financial Position
10
 
7.       Other requirements
Applicable accounting standards;
Correct referencing;
Grammar, spelling, and clarity of discussion and analysis
10
 
TOTAL MARKS FOR ASSIGNMENT
 
70
 
INDIVIDUAL MARK
DIVIDE BY 2.8
25
 
CLASS PRESENTATION
 
5
 
 
 
 
 
OVERALL TOTAL MARKS
 
25
 
 
 
 
 
 

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