| Calculating of Non-controlling Interest in Tower LTD |
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| (I) Non-controlling interest on acquisition date |
Sydney LTD |
10% Non-controlling interest |
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| Share Capital |
280000 |
20000 |
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| Retained earnings-on acquisition |
52200 |
5800 |
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| Fair value adjustments |
0 |
2100 |
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332200 |
27900 |
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| Investment in Tower Ltd |
289980 |
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| Bargain Purchase |
-42220 |
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| Adjustment/ elimination journal entries for consolidation at 30 June 2014 for the Economic Entity |
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| 1. Fair value adjustment Journal |
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| A. Dr. Accumulated depreciation |
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30000 |
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| CR. Depreciation Expense |
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30000 |
| (Reinstating Accumulated depreciation in the statement of financial position) |
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| B. Dr. Plant |
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50000 |
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| Cr. Revaluation Surplus |
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35000 |
| Cr. DTL |
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15000 |
| (Revaluating the asset to fair value and recognising the associated deferred tax liability) |
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| C. Dr. Depreciation Expense |
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10000 |
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| Dr. Opening retained earnings |
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20000 |
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| Cr. Accumulated Depreciation |
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30000 |
| (recognising current year’s depreciation expense and carring forward previous years expenses) |
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| D. Dr DTL |
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9000 |
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| Cr. Income Tax Expense |
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3000 |
| Cr. Openting Retained Earnings |
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6000 |
| (Recognising tax effect on current years depreciation and carring forward previous years tax expense) |
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| E. Dr. Share Capital (60%) |
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280000 |
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| Dr. Retained Earnings (60%) |
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52200 |
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| Dr. Revaluation Surplus (60%) |
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0 |
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| Dr. Goodwill |
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-42220 |
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| Cr. Investment in Gillard LTD |
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289980 |
| (Elimination journal of investing in Gillard LTD) |
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| 2. Adjustments for intragroup sale of plant and associated depreciation adjustments |
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| A. Dr. Retained earnings |
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59000 |
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| Dr. Plant |
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5000 |
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| Cr. Accumulated Depreciation |
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64000 |
| (Reversal of gain recognised on sale of asset and reinstatement of cost and accumulated depreciation) |
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| B. Dr. DTA |
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17700 |
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| Cr. Income Tax Expense |
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17700 |
| (Reversal of Deffered tax affect) |
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| C. Dr. Accumulated Depreciation Expense |
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1000 |
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| Cr. Depreciation Expense |
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1000 |
| (Reversal of depreciation affect) |
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| D. Dr. Income Tax Expense |
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300 |
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| Cr. DTA |
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300 |
| (Reversal of income tax expense effect) |
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| 3. Intercompany Inventory transaction adjustments |
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| Dr. Sales |
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569600 |
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| Cr. COGS |
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569600 |
| (Reversal of Sales effect) |
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| 4.A. Dr.opening retained earnings |
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28000 |
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| Cr. COGS |
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28000 |
| (Carring Forward unrelised profit) |
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| 4.B Income Tax Expense |
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8400 |
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| Cr. Opening Retained Earnings |
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8400 |
| (carring forward tax effect of unrealised profit from last year) |
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| 5.A Dr. Cogs |
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18100 |
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| Cr. Inventory |
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18100 |
| (Intragroup inventory sales adjustments) |
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| 5.B Dr DTA |
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5430 |
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| Cr. Income Tax Expense |
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5430 |
| (Tax affect of unrealised gain adjustment) |
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| 5.C Dr. Sales |
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88200 |
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| Cr. COGS |
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88200 |
| (Intragroup inventory sales adjustments) |
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| 6.A Dr. Plant |
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112500 |
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| Cr. Loss on sale |
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70000 |
| Cr. Accumulated Depreciation Expense) |
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42500 |
| (Reversal of loss on plant sale) |
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| 6.B Dr. Income Tax Expense |
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21000 |
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| Cr. DTL |
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21000 |
| (Adjusting deffered tax liability effects) |
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| 6.C Dr. Depreciation Expense |
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8750 |
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| Cr. Accumulated Depreciation |
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8750 |
| (Adjusting depreciation of loss plant sale) |
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| 6.D Dr. DTL |
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2625 |
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| Cr. Income Tax Expense |
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2625 |
| (Adjusting DTL and income tax effect for the depreciation expense) |
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| 7. Dr. Impairment loss-Goodwill |
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8000 |
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| Dr. Opening Retained Earnings |
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5000 |
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| Cr. Accumulated impairment Loss |
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13000 |
| (Adjusting goodwill impairment loss) |
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| 8. Dr. Management Fee revenue |
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12900 |
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| Cr. Management fee expense |
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12900 |
| (Adjustment of intragroup management fee transaction) |
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| 9.A Dr. Dividend revenue |
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87960 |
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| Cr. Dividend Paid |
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87960 |
| (Adjustment of intragroup dividend transaction) |
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| 9.B Dr. Dividend Payable |
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43980 |
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| Cr. Dividend Receivable |
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43980 |
| (Adjustment of intragroup dividend transaction) |
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