Calculating of Non-controlling Interest in Tower LTD- MAH011014_19674_39488

Calculating of Non-controlling Interest in Tower LTD
(I)                 Non-controlling interest on acquisition date Sydney LTD 10% Non-controlling interest
Share Capital 280000 20000
Retained earnings-on acquisition 52200 5800
Fair value adjustments 0 2100
332200 27900
Investment in Tower Ltd 289980
Bargain Purchase -42220
Adjustment/ elimination journal entries for consolidation at 30 June 2014 for the Economic Entity
1. Fair value adjustment Journal
A.  Dr. Accumulated depreciation 30000
CR. Depreciation Expense 30000
(Reinstating Accumulated depreciation in the statement of financial position)
B. Dr. Plant 50000
Cr. Revaluation Surplus 35000
Cr. DTL 15000
(Revaluating the asset to fair value and recognising the associated deferred tax liability)
C. Dr. Depreciation Expense 10000
Dr. Opening retained earnings 20000
Cr. Accumulated Depreciation 30000
(recognising current year’s depreciation expense and carring forward previous years expenses)
D. Dr DTL 9000
Cr. Income Tax Expense 3000
Cr. Openting Retained Earnings 6000
(Recognising tax effect on current years depreciation and carring forward previous years tax expense)
E. Dr. Share Capital (60%) 280000
Dr. Retained Earnings (60%) 52200
Dr. Revaluation Surplus (60%) 0
Dr. Goodwill -42220
Cr. Investment in Gillard LTD 289980
(Elimination journal of investing in Gillard LTD)
2. Adjustments for intragroup sale of plant and associated depreciation adjustments
A. Dr. Retained earnings 59000
Dr. Plant 5000
Cr. Accumulated Depreciation 64000
(Reversal of gain recognised on sale of asset and reinstatement of cost and accumulated depreciation)
B. Dr. DTA 17700
Cr. Income Tax Expense 17700
(Reversal of Deffered tax affect)
C. Dr. Accumulated Depreciation Expense 1000
Cr. Depreciation Expense 1000
(Reversal of depreciation affect)
 D. Dr. Income Tax Expense 300
Cr. DTA 300
(Reversal of income tax expense effect)
3. Intercompany Inventory transaction adjustments
 Dr. Sales 569600
Cr. COGS 569600
(Reversal of Sales effect)
4.A. Dr.opening retained earnings 28000
Cr. COGS 28000
(Carring Forward unrelised profit)
4.B Income Tax Expense 8400
Cr. Opening Retained Earnings 8400
(carring forward tax effect of unrealised profit from last year)
5.A Dr. Cogs 18100
Cr. Inventory 18100
(Intragroup inventory sales adjustments)
5.B Dr DTA 5430
Cr. Income Tax Expense 5430
(Tax affect of unrealised gain adjustment)
5.C Dr. Sales 88200
Cr. COGS 88200
(Intragroup inventory sales adjustments)
6.A Dr. Plant 112500
Cr. Loss on sale 70000
Cr. Accumulated Depreciation Expense) 42500
(Reversal of loss on plant sale)
6.B Dr. Income Tax Expense 21000
Cr. DTL 21000
(Adjusting deffered tax liability effects)
6.C Dr. Depreciation Expense 8750
Cr. Accumulated Depreciation 8750
(Adjusting depreciation of loss plant sale)
6.D Dr. DTL 2625
Cr. Income Tax Expense 2625
(Adjusting DTL and income tax effect for the depreciation expense)
7. Dr. Impairment loss-Goodwill 8000
Dr. Opening Retained Earnings 5000
Cr. Accumulated impairment Loss 13000
(Adjusting goodwill impairment loss)
8. Dr. Management Fee revenue 12900
Cr. Management fee expense 12900
(Adjustment of intragroup management fee transaction)
9.A Dr. Dividend revenue 87960
Cr. Dividend Paid 87960
(Adjustment of intragroup dividend transaction)
9.B Dr. Dividend Payable 43980
Cr. Dividend Receivable 43980
(Adjustment of intragroup dividend transaction)
Sydney LTD and Its controlled entity consolidation worksheet for the year ending30 June 2014
Sydney Ltd Tower Ltd Elimination & adjustments Consolidated Statement
Detailed Reconciliation of opening and closing retained earnings
Sales Revenue 1365300 992200
LESS: COGS 692000 618500
Gross Profit 673300 373700
Other Revenue
Management fee revenue 12900
Dividend Reveneu 87960
Depreciation 133300 59000
Mangement fee expense 0 12900
Loss on Sale of Assets 70000
Other expense 426200 163400
Profit before tax 144660 138400
Tax expense 17010 41520
Profit for the year 127650 96880
Non-controlling interest in profit after tax
Sydney’s interest in profits after tax
Retained earning at the beginning year 159220 134320
Dividends paid or declared 75000 96400
Retained earnings  at the end of the year 211870 134800
Statement of financial position
Shareholder’s equity
Revaluation Surplus
Retained earnings 211870 134800
Share capital 450000 200000
Non-controlling Interest
Current liabilities
Accounts payable 210280 148180
Income Tax payables 10910 42420
Dividend payable 37500 48200
Non-current liabilities
Bank Loans 710000 650000
Provision for employee benefits 29100 14300
Deferred Tax Liability 6100
1665760 1237900
Current assets
Accounts receivable 176800 98700
Inventory 98300 121200
Allowance for doubtful debt -22100 -9500
Dividend receivable 43980
Non-current Assets
Deferred Tax asset 900
Land and building 790000 910800
Plant at cost 449700 301200
Accumulated depreciation -169400 -185400
Shares in The Rocks Pty Ltd 8500
Investment in Tower Ltd 289980
Total 1665760 1237900 0 0 0