The financial statements of Sunset Ltd and its subsidiary Moonrise Ltd, at 30 June 2012, contained the following information:
Sunset Ltd Moonrise Ltd
Profit before tax $ 64 000 $ 36 000
Income tax expense 26 000 4 800
Profit for the year 38 000 31 200
Retained earnings (1/7/11) 30 000 42 000
68 000 73 200
Dividend paid 10 000 0
Retained earnings (30/6/12) 58 000 73 200
Share capital 500 000 200 000
General reserve 160 000 30 000
Liabilities 120 000 66 000
$ 838 000 $ 369 200
Land $ 172 000 $ 102 000
Plant 240 000 160 000
Accumulated depreciation (100 000) (20 000)
Financial assets 60 000 40 000
Inventory 60 000 80 000
Cash 6 000 7 200
Shares in Moonrise Ltd 400 000 0
$ 838 000 $ 369 200
Sunset Ltd had acquired all the share capital of Moonrise Ltd on 1 July 2010 for $400 000 when the equity of Moonrise Ltd consisted of:
Share capital - 10 000 shares $200 000
General reserve 40 000
Retained earnings 30 000
At the acquisition date by Sunset Ltd, Moonrise Ltd's non-monetary assets consisted of:
Carrying amount Fair value
Land $80 000 $120 000
Plant (cost $120 000) 110 000 130 000
Inventory 60 000 80 000
The plant had a further 5 year life. All the inventory was sold by 30 June 2011. All valuation adjustments to non-current assets are made on consolidation.
The tax rate is 30%.
In September 2010, Moonrise Ltd transferred $10 000 from its general reserve, earned before 1 July 2010, to retained earnings.
Required: Prepare the consolidated journal entries, the consolidated worksheet and the consolidated financial statements for the year ended 30 June 2012.