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  3. larry ltd purchased all the shares of john ltd on

Larry Ltd purchased all the shares of John Ltd on 31 December 20X3. John's assets...

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Accounting

Larry Ltd purchased all the shares of John Ltd on 31 December 20X3. John's assets were recorded at fair value except for the following:

Land:

Carrying amount

$47000

Fair value

$70000

Inventory:

Carrying amount

$23000

Fair value

$21000

Equipment:

Carrying amount

$50000

Fair value

$75 000

Additional information for the above assets:

  • John uses the AASB 116 cost model to measure the land and equipment. However, for group/consolidation purposes, revaluation to fair value is the model applied.
  • Fair value of the land at 31 December 20X4 was $90,000.
  • John's inventory held at the control date was still in stock as at 31 December 20X4.
  • The equipment had a remaining useful life of 5 years at the control date. The residual value is nil. The equipment originally cost $70,000.

Required:

Prepare entries for the required consolidation data adjustments on 31 December 20X4, the year end.(9 marks)

Reminder: No marks will be awarded for workings/calculations. Narrations are not required for the entries.

Please provide your answer in the answer space below.Clearly label the DR and CR sides for each entry (otherwise no marks).

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