. Question 4 (31 marks) The information regarding Parent Limited is as follows: Sandy Limited Parent acquired 65% of the outstanding ordinary shares of Sandy Limited for $210,000 on 1 January 2019. At the acquisition date, Sandy reported retained earnings of $60,000. The fair value of Sandy's recorded assets and liabilities was equal to their book value except for an unrecorded brand name (intangible assets), which had a fair value of $30,000 and an expected remaining useful life of ten years. Non-controlling interest's fair value on that date was $84,000. The investment in Sandy is carried at cost on Parent's accounting books. Amah Limited On 1 January 2020, Parent acquired a 30% interest in Amah Limited for $48,000, and obtained the significant influence over Amah. The book value of Amah's net identifiable assets was the same as their fair value as at the acquisition except for the equipment, which had a fair value of $18,000 but a net book value of $12,000 with an expected remaining useful life of five years. On the acquisition date, the balance of retained earnings in Amah was $60,000. Additional information On 1 January 2020, Sandy sold a building (with an original cost of $30,000 and accumulated depreciation of $18,000) to Parent for $45,000 with a remaining use life of five years. During 2020, Parent sold inventory to Sandy with a transfer price of $54,000 costing $36,000. Two-third of the transferred inventory remained in Sandy on 31 December 2020, and was sold out next year. In 2021, Parent sold inventory costing $60,000 for $75,000 to Sandy. Sandy still held 25% of the transferred inventory at the end of 2021. The three companies apply the straight-line depreciation (amortization) method for property, equipment and other depreciable assets with the assumption of zero residual value. There has been no change in the share capital of the three companies since 2019. Parent adopts the full goodwill approach in consolidation. The financial statements of the three companies for 2021 are reported below. Parent $ Sandy $ Amah $ Sales 390,000 244,500 138,000 Cost of goods sold (288,000) (177,000) (102,000) . . . . . inventory at the end of 2021. The three companies apply the straight-line depreciation (amortization) method for property, equipment and other depreciable assets with the assumption of zero residual value. There has been no change in the share capital of the three companies since 2019. Parent adopts the full goodwill approach in consolidation. The financial statements of the three companies for 2021 are reported below. Parent $ Sandy $ Amah $ Sales 390,000 244,500 138,000 Cost of goods sold (288,000) (177,000) (102,000) Other income including dividend income 37,200 Depreciation and amortization (45,000) (13,200) (2,700) Other expenses (19,800) (28,200 (17,400) Profit for the year 74,400 26,100 15,900 Retained earnings, 1 January 261,000 132,000 70,500 Dividends paid (18,000) (10,500) (12,000) Retained earnings, 31 December 317,400 147,600 74,400 Property, plant and equipment, net 387,900 161,100 98,100 Investment in subsidiary, cost 210,000 Investment in associate 48,000 Inventory 244,500 90,000 59,400 Cash and receivables 48,900 88,500 46,800 939,300 339,600 204,300 Share capital 300,000 90,000 45,000 Retained earnings, 31 December 317,400 147,600 74,400 Payables 321,900 102,000 84,900 939,300 339,600 204,300 Required (ignore taxation): Prepare the consolidation worksheet for the year ended 31 December 2021 for Parent Limited. . Question 4 (31 marks) The information regarding Parent Limited is as follows: Sandy Limited Parent acquired 65% of the outstanding ordinary shares of Sandy Limited for $210,000 on 1 January 2019. At the acquisition date, Sandy reported retained earnings of $60,000. The fair value of Sandy's recorded assets and liabilities was equal to their book value except for an unrecorded brand name (intangible assets), which had a fair value of $30,000 and an expected remaining useful life of ten years. Non-controlling interest's fair value on that date was $84,000. The investment in Sandy is carried at cost on Parent's accounting books. Amah Limited On 1 January 2020, Parent acquired a 30% interest in Amah Limited for $48,000, and obtained the significant influence over Amah. The book value of Amah's net identifiable assets was the same as their fair value as at the acquisition except for the equipment, which had a fair value of $18,000 but a net book value of $12,000 with an expected remaining useful life of five years. On the acquisition date, the balance of retained earnings in Amah was $60,000. Additional information On 1 January 2020, Sandy sold a building (with an original cost of $30,000 and accumulated depreciation of $18,000) to Parent for $45,000 with a remaining use life of five years. During 2020, Parent sold inventory to Sandy with a transfer price of $54,000 costing $36,000. Two-third of the transferred inventory remained in Sandy on 31 December 2020, and was sold out next year. In 2021, Parent sold inventory costing $60,000 for $75,000 to Sandy. Sandy still held 25% of the transferred inventory at the end of 2021. The three companies apply the straight-line depreciation (amortization) method for property, equipment and other depreciable assets with the assumption of zero residual value. There has been no change in the share capital of the three companies since 2019. Parent adopts the full goodwill approach in consolidation. The financial statements of the three companies for 2021 are reported below. Parent $ Sandy $ Amah $ Sales 390,000 244,500 138,000 Cost of goods sold (288,000) (177,000) (102,000) . . . . . inventory at the end of 2021. The three companies apply the straight-line depreciation (amortization) method for property, equipment and other depreciable assets with the assumption of zero residual value. There has been no change in the share capital of the three companies since 2019. Parent adopts the full goodwill approach in consolidation. The financial statements of the three companies for 2021 are reported below. Parent $ Sandy $ Amah $ Sales 390,000 244,500 138,000 Cost of goods sold (288,000) (177,000) (102,000) Other income including dividend income 37,200 Depreciation and amortization (45,000) (13,200) (2,700) Other expenses (19,800) (28,200 (17,400) Profit for the year 74,400 26,100 15,900 Retained earnings, 1 January 261,000 132,000 70,500 Dividends paid (18,000) (10,500) (12,000) Retained earnings, 31 December 317,400 147,600 74,400 Property, plant and equipment, net 387,900 161,100 98,100 Investment in subsidiary, cost 210,000 Investment in associate 48,000 Inventory 244,500 90,000 59,400 Cash and receivables 48,900 88,500 46,800 939,300 339,600 204,300 Share capital 300,000 90,000 45,000 Retained earnings, 31 December 317,400 147,600 74,400 Payables 321,900 102,000 84,900 939,300 339,600 204,300 Required (ignore taxation): Prepare the consolidation worksheet for the year ended 31 December 2021 for Parent Limited