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Sky Ltd acquired all the issued shares (Ex div.) of Nu Ltd on 1 July 2018 for $100 000. At this date Nu Ltd recorded a dividend payable of $10 000 and equity of: | Share capital Retained earnings | Asset revaluation surplus $54 000 36 000 18 000 All the identifiable assets and liabilities of Nu Ltd were recorded at amounts equal to their fair values at acquisition date except for: Inventories Machinery (cost $100 000) Carrying amount 16 000 92 500 Fair value 18 000 94 000 The machinery was considered to have a further 5-year life. 90% of the inventory was sold by 30 June 2019. The remainder was sold by 30 June 2020. Both Sky Ltd and Nu Ltd use the valuation method to measure the land. At 1 July 2018, the balance of Sky Ltd's asset revaluation surplus was $13 500. In May 2019, Nu Ltd transferred $3 000 from the retained earnings at 1 July 2018 to a general reserve. The tax rate is 30%. + The following information was provided by the two companies at 30 June 2019. Sky Ltd | Nu Ltd Profit before tax $ 120 000 $ 12 500 | Income tax expense (56 000) 1 (4200) Profit for the year 64 000 8 300 Retained earnings (1/7/18) 80 000 36 000 144 000 44 300 Transfer to general reserve (0) (3 000) Retained earnings (30/6/19) $144 000 $41 300 Share Capital Retained earnings General reserve Asset revaluation reserve Liabilities $360 000 144 000 10 000 18 500 42 500 $575 000 $54 000 41 300 3 000 20 000 13 000 $131 300 Land Plant & Machinery Accumulated depreciation Inventories Shares in Nu Ltd $160 000 360 000 (110 000) 55 000 110 000 $575 000 $20 000 125 600 (33 000) 18 700 Plant & machinery $131 300 Required A. Prepare the acquisition analysis and BCVR entries of Sky Ltd at 1 July 2018 B. Prepare the consolidation worksheet entries at 30 June 2019. C Complete the consolidation worksheet at 30 June 2019. (Suggested template below)

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