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On 1 July 2016, Pandora Ltd acquired all the issued shares of Sebastian Ltd. Pandora Ltd paid $30,000 in cash and 20,000 shares in Pandora Ltd valued at $3 per share. At this date, the equity of Sebastian Ltd consisted of $66,000 share capital and $6,000 retained earnings. At I July 2016, all the identifiable assets and liabilities of Sebastian Ltd were recorded at amounts equal to their fair values except for Fair value $123000 105 000 22500 Carrying amount Plant (cost $150000) Patents Inventories $120000 90000 18000 The plant was considered to have a further 5-year life. The patents were sold for $120,000 to an external entity on 18 August 2016. The inventory was all sold by 30 June 2017 Additional information: (a) Pandora Ltd sells certain raw materials to Sebastian Ltd At I July 2017, Sebastian Ltd held inventory sold to it by Pandora Ltd in the previous year at a profit of S600. During the 2017/2018 year, Pandora Ltd sold inventory to Sebastian Ltd for $21,000. None of to be used in its manufacturing process this was on hand at 30 June 2018 (b) Sebastian Ltd also sells items of inventory to Pandora Ltd. During the 2017/2018 year, Sebastian Ltd sold goods to Pandora Ltd for 54,500, At 30 June 2018, inventory which had been sold to Pandors Ltd at a profit of $300 was still on hand in Pandora Ltd's inventory (c) On 1 July 2017, Sebastian Ltd sold an item of plant to Paindora Ltd for S15,000. This plant had a carrying amount in the records of Sebastian Ltd of $14,000 at time of sale. This type of plant is depreciated at 10% pa. on cost (d) On I January 2017, Pandora Ltd sold an item of inventory to Sebastian Ltd for S18,000. The inventory had cost Pandora Ltd S16,000, This item was classified by Sebastian Ltd as plant. Plant of this type is depreciated by Sebastian Ltd at 20% pa (e) On I March 2018, Sebastian Ltd sold an item of plant to Pandora Ltd. Whereas Sebastian Ltd classified this as plant, Pandora Ltd classified it as inventory. The sales price was $9,000 which included a profit to Sebastian Ltd of s1.500. Pandora Ltd sold this to another entity on 31 March 2018 for $9,900 (f) The tax rate is 30%. On 1 July 2016, Pandora Ltd acquired all the issued shares of Sebastian Ltd. Pandora Ltd paid $30,000 in cash and 20,000 shares in Pandora Ltd valued at $3 per share. At this date, the equity of Sebastian Ltd consisted of $66,000 share capital and $6,000 retained earnings. At I July 2016, all the identifiable assets and liabilities of Sebastian Ltd were recorded at amounts equal to their fair values except for Fair value $123000 105 000 22500 Carrying amount Plant (cost $150000) Patents Inventories $120000 90000 18000 The plant was considered to have a further 5-year life. The patents were sold for $120,000 to an external entity on 18 August 2016. The inventory was all sold by 30 June 2017 Additional information: (a) Pandora Ltd sells certain raw materials to Sebastian Ltd At I July 2017, Sebastian Ltd held inventory sold to it by Pandora Ltd in the previous year at a profit of S600. During the 2017/2018 year, Pandora Ltd sold inventory to Sebastian Ltd for $21,000. None of to be used in its manufacturing process this was on hand at 30 June 2018 (b) Sebastian Ltd also sells items of inventory to Pandora Ltd. During the 2017/2018 year, Sebastian Ltd sold goods to Pandora Ltd for 54,500, At 30 June 2018, inventory which had been sold to Pandors Ltd at a profit of $300 was still on hand in Pandora Ltd's inventory (c) On 1 July 2017, Sebastian Ltd sold an item of plant to Paindora Ltd for S15,000. This plant had a carrying amount in the records of Sebastian Ltd of $14,000 at time of sale. This type of plant is depreciated at 10% pa. on cost (d) On I January 2017, Pandora Ltd sold an item of inventory to Sebastian Ltd for S18,000. The inventory had cost Pandora Ltd S16,000, This item was classified by Sebastian Ltd as plant. Plant of this type is depreciated by Sebastian Ltd at 20% pa (e) On I March 2018, Sebastian Ltd sold an item of plant to Pandora Ltd. Whereas Sebastian Ltd classified this as plant, Pandora Ltd classified it as inventory. The sales price was $9,000 which included a profit to Sebastian Ltd of s1.500. Pandora Ltd sold this to another entity on 31 March 2018 for $9,900 (f) The tax rate is 30%

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