You were requested to prepare the followings:

I. acquisition analysis and adjustment/elimination journal entries for consolidation at acquisition, 1 July 2021

II. adjustment/elimination journal entries for consolidation as at 30 June 2022, and

III. adjustment/elimination journal entries for consolidation as at 30 June 2023.

The practical project involves two parts: - Part A is the preparation of a selection of consolidation elimination journals for an economic entity comprising a parent and a subsidiary. - Part B is an explanation and discussion of the business combination. Part A Swan River Ltd (Swan River) acquired 100\% of the shares of Dresden Ltd (Dresden) on 1 July 2021. The cost of investment was $750,000. At that date the capital and reserves of Dresden were: At the date of acquisition all assets of Dresden were considered to be fairly valued, except for a plant that had a fair value $30,000 greater than its carrying amount. The cost of the plant was $100,000, and it had accumulated depreciation of $60,000. The plant had original estimated useful life of 10 years. During the financial year 01/07/2021-30/06/2022, Dresden sold $29,000 in inventory to Swan River for on-sale to external parties. The inventory had originally cost Dresden $22,000. At the year end, Swan River still had half of the inventory on hand. On-hand inventory was expected to be sold in the subsequent period. There was no dividend claimed and paid from both entities for year ended 30 June 2022. There were no other intro-group transactions between Swan River and Dresden for year ending 30 June 2022. 1 Swan River incurred the following transactions with Dresden during financial year 01/07/202230/06/2023 : - Swan River made total sales in inventory to Dresden of $51,000, while Dresden sold $76,000 in inventory to Swan River. These inventories are expected to be sold to external parties. - The closing inventory in Swan River includes inventory acquired from Dresden at a cost of $36,000. This cost Dresden $29,000 to purchase. Dresden sold all inventory acquired from Swan River to external parties during the year. - On 1 July 2022 Swan River sold a machinery to Dresden for $145,000 when its carrying amount in Swan River's accounts was $100,000 (initial cost $168,650, accumulated depreciation $68650 ). This machinery is assessed as having a remaining useful life of 9 years. - Swan River provided management consultation to Dresden, and this was the first time that Swan River Ltd provided such service to Dresden. At the end of 2023, Dresden paid $8,000 for these services and has a balance of $1,000 payable at year end. - Dresden has several long-term loans, including a four-year loan for $60,000 from Swan River. This loan was effective from 1 July 2022 . Interest rate was 5% per annum. During the year ending 30 June 2023, Dresden paid $1,500 interest on this loan. After meeting with your supervisor, you gathered the following information which you might need to complete your work: - Swan River has the following accounting policies for the economic entity: > Revaluation adjustments on acquisition are to be made on consolidation only, not in the books of any subsidiary. Plant and machinery are depreciated using the straight-line method with no residual value. For part-years, depreciation is to be calculated on the number of months the asset is held in the relevant year. All calculated amounts are to be rounded to the nearest whole dollar. Companies in the group do not show cents in any journals, worksheets, or financial statements. - Management team of Swan River believes that goodwill acquired from business combination is impaired by $6,000 in the current financial year. Previous impairment of goodwill amounted to $5,000. - Swan Rive has small shareholdings in other companies. - Dresden declared and paid dividend $93000 on 30 June 2023. - Swan River declared dividend $200,000 and paid dividend $150,000 on 30 June 2023. - The company tax rate is currently 30% and this rate has not changed for several years. - Journal narrations are required. - Number each year consolidation elimination/adjusting journal entries by 1,2,3,, etc; Where more than one journal entry is needed for an event to be completely accounted for add the letters a,b,c,..etc to them as necessary