Q4

On the 1st July 2021, Abrams Ltd purchased 75% of the issued shares of Constantia Ltd for $214,500. The partial goodwill method is used on consolidation. The equity of Constantia Ltd was made up as follows:

Share capital                     $104,000

Retained earnings               52,000

Total equity                        $156,000

At the date of acquisition all the identifiable net assets were recorded at fair value except for machinery which had a carrying value of $26,000, a fair value of $52,000 and a remaining useful life of 5 years. The following information has been extracted from the financial statements of Constantia Ltd:

Required

Prepare the consolidation journal entries for consolidated financial statements prepared by Constantia Ltd for:

The date of acquisition, 1st July 2021,

and at 30th June 2022,

and at 30th June 2023.