Auquisition analysis parent holds previously acquired shares in

Auquisition analysis parent holds previously acquired shares in subsidiary,worksheet entries at acquisition date.

Corporate accounting and reporting unit. Currently using book applying international financial reporting standards written by Wiley.

Please find below the question

At 1 July 2014, Pavo Ltd acquired 60% of the shares of Octans Ltd for $153,000 on a cum div. basis.

Pavo Ltd had acquired 40% of the shares of Octans Ltd two years earlier for $80 000. This investment, classified as a financial asset, was
recorded as a fair value on 1 July 2014 of $ 102 .000. The changes in fair value had all been taken to other comprehensive income. At 1 July
2014, the equity of Octans Ltd consisted of:

Share capital $ 160,000

Retained earnings $ 40,000

At this date , the identifiable

assets and liabilities of Octans ltd were recorded at fair value except for:

Carrying

amount. Fair value

Inventory $ 40,000. $. 44,000

Plant(cost

$120,000). $100,000 $105 .000

At 1 July 2014, Octans ltd assets and liabilities included a

dividend payable of $5000, and goodwill of $6000 ( net of $4000 accumulated impairment losses). An analysis of the unrecorded intangibles
Octans ltd revealed that the company had unrecorded internally generated brands, considered to have a fair v alue of $ 50,000. Further,
Octans ltd had exjaensed research outlays of $80,000 that were considered to have a fair value of $ 20 000. In its financial statement
statements at 30 une 2014, Octans ltd ad reported a contingent liability relating to a potential claim by customers for unsatisfactory
products, the fair value of the claim being $ 10,000.

The tax rate is 30%.

Required

Prepare the acquisition analysis at 1 July 2014,

and the consolidation worksheet entries for preparation of consolidated financial statements of Pav o ltd at that date.

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