Consolidation of wholly owned subsidiary, pre-acquisition equity and BCVR entries for assets and liabilities

Tamara Ltd acquired all the issued shares of Rex Ltd on 1 January 2016 for $88 000. At this date the equity of Rex Ltd consisted of:

Share capital $ 40 000

General reserve 10 000

Retained earnings 8 000

All the identifiable assets and liabilities of Rex Ltd were recorded at amounts equal to their fair values except for:

                                                           Carrying amount                                     Fair value

Fixtures & Fittings (cost $70 000)            $50 000                                                  $55 000

Inventory                                              10 000                                                    16 000

Of the inventory on hand at 1 January 2016, 90% was sold by 30 June 2016. The remainder was all sold by 30 June 2017. The Fixtures & Fittings was considered to have a further 2-year life with benefits to be received equally in each of those years. There were no records in the books for a provision of legal claim worth 5,000 and patents of 60,000. These were reflected at fair value.

The tax rate is 30%.

Required:

Prepare the consolidated worksheet entries for the consolidated financial statements prepared by Tamara Ltd at 30 June 2016.

Show acquisition analysis calculation, BCVR entries and Pre-acquisition entries for 30.6.16