Prepare the consolidation worksheet JOURNAL ENTRIES for the preparation of consolidated financial statements by Luke Ltd at 30 June 2016. NOTE a consolidation worksheet is NOT required. Your answer should include an acquisition analysis with a calculation of goodwill, pre-acquisition entries, dividend adjustments, intragroup sales and transfers, and a calculation of the non-controlling interest. (14 marks)
Q4. On 1 July 2015 Rapid Ltd purchased 40 per cent of the ordinary shares of Creek Ltd for $3 250 000. The remaining 60 per cent of the ordinary shares of Creek Ltd are owned by two shareholders, Market Ltd, which owns 40 per cent of the shares, and Wholefoods Ltd, which owns 20 per cent of the shares.
Creek Ltd’s constitution provides that at general meetings of the company, ordinary shareholders are entitled to vote on resolutions and elect directors, on the basis of one vote per ordinary share. Creek Ltd’s five-member board of directors consists of: • two representatives of Rapid Ltd • two representatives of Market Ltd • one representative of Wholefoods Ltd.. Chapter 32: ACCOUNTING FOR INVESTMENTS IN ASSOCIATE S AND JOINT VENTURES 41 Each member of Creek Ltd’s board of directors is entitled to one vote on issues/resolutions being considered by the board of directors.
Comments