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On 1 July 2012 Sarah Ltd acquires all the shares in Jane Ltd for $594,000 cash
The financial statements of Jane Ltd as at 1 July 2012 shows the following:
Retained earnings 171,000
Share capital 214,000
The tax rate is 30%
At the date of acquisition all the net assets of Jane Ltd are at fair value except for the following:
| | Carrying amount | Fair value |
| Equipment (cost $241,000) | $145,000 | $215,000 |
The equipment has a further 19 years of useful life.
All consolidation entries on 30 June 2020 are shown below:
| Dr. Retained earnings | $171,000 | |
| Dr. Share capital | $214,000 | |
| Dr. BCVR | | |
| Dr. Goodwill | | |
| Cr. Investment in Jane Ltd | | $594,000 |
| Dr. Accumulated depreciation | 241,000 145,000 | |
| Dr.(or Cr.) Equipment | | |
| Cr. BCVR | | ( 215,000 145,000 ) x 70% |
| Cr. DTL | | ( 215,000 145,000 ) x 30% |
| Dr. Retained earnings | xxx | |
| Dr. Depreciation expense | ( 215,000 145,000 ) / 19 | |
| Cr. Accumulated depreciation | | |
| Dr. DTL | | |
| Cr. Income tax expense | | ( 215,000 145,000 ) x 30% / 19 |
| Cr. Retained earnings | | |
Complete the consolidation journals above and enter the amount of xxx (retained earnings) in the answer block below:
Answer:
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