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On 1 July 2017, Goldstein Ltd acquired 80% of the share capital of Mailman Ltd for $1,000,000.At this date, the financial statements of Mailman Ltd included the following items:

$

Retained Earnings

400,000

Share Capital

600,000

General Reserve

100,000

At 1 July 2017 all of the identifiable net assets of Mailman Ltd were recorded at fair value except for the following assets:

Carrying amount

Fair value

$

$

Inventory

150,000

180,000

Machinery (cost $450,000)

350,000

400,000

Adjustments for differences between carrying amounts and fair values of assets at acquisition date are made on consolidation.During the year ended 30 June 2017, all inventories on hand at 1 July 2017 was sold.Machinery had a further ten-year life, with benefits expected to be received evenly over that time.

Additional information:

(i)During the year ended 30 June 2020, Mailman Ltd sold inventory to Goldstein Ltd for $300,000 (cost price was $200,000).The inventory of Goldstein Ltd at 30 June 2020 included 40% of these goods purchased from Mailman Ltd.

(ii)The partial goodwill method is used by Goldstein Ltd.

(iii)The balance of the general reserve of Mailman Ltd at 1 July 2018 was $150,000.

(iv)The income tax rate is 30%.

(v)Extracts from the financial statements of Goldstein Ltd and Mailman Ltd at 30 June 2020 were as follows:

Goldstein Ltd

Mailman Ltd

$

$

Profit for the period

200,000

150,000

Retained earnings (1/7/19)

225,000

800,000

425,000

950,000

Interim dividend paid

(45,000)

(50,000)

Dividend declared

(30,000)

-

(75,000)

(50,000)

Retained earnings (30/6/20)

350,000

900,000

Share capital

900,000

600,000

General reserve

225,000

150,000

Dividend payable

30,000

-

QUESTION 4 (continued)

Required:

Prepare the consolidation worksheet general journal entries necessary for the preparation of the consolidated financial statements of Goldstein Ltd at 30 June 2020.(Note:Narrations areNOTrequired and the worksheet and consolidated financial statementsDO NOThave to be prepared).

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