Corporate Accounting Assignment: Blake Ltd and Seven Ltd Analysis

This document presents a comprehensive solution to a corporate accounting assignment, focusing on the analysis of Blake Ltd and its subsidiary, Seven Ltd. The solution includes an acquisition analysis, calculating goodwill, and determining the non-controlling interest. It details the consolidation worksheet, incorporating pre-acquisition entries, dividend adjustments, and intercompany transactions involving sales of inventory and plant. Journal entries are provided to illustrate the accounting treatment of these transactions, including the impact on retained earnings, tax expense, and deferred tax assets. Furthermore, the solution addresses management fee revenue and expense, impairment of goodwill, and the calculation of non-controlling interest on acquisition and during the period. The solution also provides the bibliography of the references used.

Running head: CORPORATE ACCOUNTING
Corporate Accounting
Name of the Student:
Name of the University:
Author’s Note:

Table of Contents
Answer to Question 3:.....................................................................................................................2
Bibliography:...................................................................................................................................4

Answer to Question 3:
ACQUISITION ANALYSIS:
Particulars Amount ($) Amount($)
Cost of Acquisition 3,06,160.00
Less:
Share Capital of Seven Ltd. On 1/7/10 1,72,000.00
Retained Earnings of Seven Ltd. On 1/7/10 1,46,200.00
Total Equity of Seven Ltd. On 1/7/18 3,18,200.00
Add:
Share of NCI in Share Capital 34,400.00
Share of NCI in Retained Earnings 29,240.00
Total Non-Controlling Interest 63,640.00
Goodwill Acquired on Acquisition by Blake Ltd. 51,600.00
Dr. Cr.
Date Particulars Amount Amount
($) ($)
31-Jul-18 PRE-ACQUISITION ENTRY-
Share capital 1,37,600.00
Retained earnings (01/07/18) 1,16,960.00
Goodwill 51,600.00
Investment in Seven Ltd. 3,06,160.00
DIVIDEND ADJUSTMENT-
Dividend revenue from Seven Ltd. 63,984.00
Dividend paid 63,984.00
INTRAGROUP SALES & TRANSFER-
a) Sale of Opening Inventory-
Retained earnings (01/07/18) 4,214.00
Tax expense 1,806.00
Cost of goods sold 6,020.00
b) Sale of Inventory by Seven Ltd. To Blake Ltd.
Sales revenue 44,720.00
Cost of goods sold 39,904.00
Inventory 4,816.00
Deferred tax assets 1,444.80
Tax expense 1,444.80
In the Books of Blake Ltd.
Consolidation Worksheet Journal Entries

c) Sale of Inventory by Blake Ltd. To Seven Ltd.
Sales 55,900.00
Cost of goods sold 53,836.00
Inventory 2,064.00
Deferred tax assets 619.20
Tax expense 619.20
d) Sale of Plant by Blake Ltd. To Seven Ltd.
Profit on sale of plant 30,100.00
Plant-at cost 30,100.00
Accumulated depreciation 5,016.67
Depreciation expense 5,016.67
MANAGEMENT FEE REVENUE & EXPENSE-
Management fee revenue 22,790.00
Management fee expense 22,790.00
IMPAIRMENT OF GOODWILL-
Loss on goodwill impairment 2,580.00
Accumulated loss on impairment-Goodwill 2,580.00
NON-CONTROLLING INTEREST-
a) NCI on Acquisition
Share capital 6,880.00
Retained earnings (01/07/18) 5,848.00
Non-controlling interest 12,728.00
a) Sale of Opening Inventory-
Non-Controlling Interest Share of Profit 842.80
Retained earnings (01/07/18) 842.80
b) Sale of Inventory by Seven Ltd. To Blake Ltd.
Non-Controlling Interest 674.24
Non-Controlling Interest Share of Profit 674.24
c) Dividend Adjustment
Non-controlling interest 15,996.00
Dividend paid 15,996.00

Bibliography:
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Australia.
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Henderson, S., Peirson, G., Herbohn, K. and Howieson, B., 2015. Issues in financial accounting.
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Hoskin, R.E., Fizzell, M.R. and Cherry, D.C., 2014. Financial Accounting: a user perspective.
Wiley Global Education.
Hoyle, J.B., Schaefer, T. and Doupnik, T., 2015. Advanced accounting. McGraw Hill
Schipper, K., Francis, J. and Weil, R., 2017. Financial Accounting: Introduction to Concepts,
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standards approach.
Warren, C. and Jones, J., 2018. Corporate financial accounting. Cengage Learning