Jonathan Ltd acquired all the issued shares (ex-div.) of Thomas Ltd on 1 July 2020 for $246000. At this

date the equity of Thomas Ltd consisted of:

Share capital $ 130000

General reserve 50000

Retained earnings 40500

At the acquisition date all the identifiable assets and liabilities of Thomas Ltd consisted of:

Carrying amount Fair value

Plant (cost $230000) $ 200000 $ 210000

Land 100000 120000

Inventories 30000 38000

The inventories were all sold by 30 June 2021. The land was sold on 1 February 2021 for $150000. The

plant was considered to have a further 5-year life. The plant was sold for $155000 on 1 January 2022.

Also, at acquisition date Thomas Ltd had recorded a dividend payable of $7000 and goodwill (net of

accumulated impairment losses of $13000) of $5000. Thomas Ltd had not recorded some internally

generated brands that Jonathan Ltd considered to have a fair value of $12000. The brand was considered

to have an indefinite life. Also not recorded by Thomas Ltd was a contingent liability relating to a current

court case in which Thomas Ltd was involved and a supplier was seeking compensation. Jonathan Ltd

placed a fair value of $15000 on this liability. This court case was settled in May 2022 at which time

Thomas Ltd was required to pay damages of $16000.

In February 2021, Thomas Ltd transferred $20000 from the general reserve on hand at 1 July 2020 to

retained earnings. A further $15000 was transferred in February 2022.

Both companies have an equity account entitled Other components of equity to which certain gains and

losses from financial assets are taken. At 1 July 2021, the balances of these accounts were $30000

(Jonathan Ltd) and $15000 (Thomas Ltd). The financial statements of the two companies at 30 June 2022

contained the following information:

(Screenshot Provided)

Requirements:

1. Complete the consolidated worksheet for 30 June 2022

2. Prepare the consolidated financial statements at 30 June 2022

3. Write a report to explain the consolidation process as per AASB10 for wholly owned entities.

Note:

Additionally I'm also providing worksheet format...which make easy to solve you.

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For assignment, students use the consolidation worksheet below for part c of your assignment. Fill in adjustments and Group columns and number your journals