In February 2021, Thomas Ltd transferred $20 000 from the general

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In February 2021, Thomas Ltd transferred $20 000 from the general reserve on hand at 1 July 2020 to retained earnings. A further $15 000 was transferred in February 2022.

Both companies have an equity account entitled ‘Other components of equity’ to which certain gains and losses from financial assets are taken. At 1 July 2021, the balances of these accounts were $30 000 (Jonathan Ltd) and $15 000 (Thomas Ltd). The financial statements of the two companies at 30 June 2022 contained the following information:

Revenues
Expenses
Trading profit
Gains (losses) on sale of non-current assets Profit before tax

Income tax expense
Profit for the period
Retained earnings (1/7/21) Transfer from general reserve

Dividend paid
Retained earnings (30/6/22) Share capital
General reserve
Other components of equity

Total equity

Accounts payable Deferred tax liability
Other non-current liabilities

Total liabilities
Total equity and liabilities
Plant
Accumulated depreciation — plant Land
Brands
Shares in Thomas Ltd
Financial assets
Cash
Inventories
Goodwill
Accumulated impairment losses Total assets

Jonathan Ltd 90 000 34 000 56 000

8 000 64 000 12 000 52 000 103 000 30 000 185 000

20 000 165 000 150 000 10 000 25 000 350 000 40 000 18 000 250 000 308 000 658 000 430 000 (182 000) 150 000

80 000 246 000 110 000

10 000 40 000 20 000

0 658 000

Thomas Ltd 64 000 42 000 22 000

8 000 30 000 5 000 25 000 55 000 15 000 95 000 0 95 000

130 000 20 000 18 000 263 000 10 000 10 000 230 000 250 000 513 000 320 000 (220 000)

20 000 0

107 000 5 000 30 000 18  000

(13 000) 513 000

Required

Calculate acquisition analysis as at 1 July 2020

Prepare the consolidation journal entries for 30 June 2022

Complete the consolidated worksheet for 30 June 2022

Prepare the consolidated financial statements at 30 June 2022

Write a report to explain the consolidation process as per AASB10 for wholly owned entities.

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Marking guide: Interpretation and representation 20%

Calculations Analysis Assumptions Communications

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ACC705 CORPORATE ACCOUNTING AND REPORTING T123 *AUSTRALIAN INSTITUTE OF BUSINESS AND MANAGEMENT PTY LTD ©

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