On 1 July 2020, Sky Ltd acquired 70% of the share capital (ex. div.) of Jim Ltd for $500,000. At that date, the relevant balances in the records of Jim Ltd were: Share capital General reserve Retained earnings Dividend payable S 434,000 35,000 126,000 14,000 At the date of acquisition all assets and liabilities of Jim Ltd were recorded in the accounting records at amounts equal to their fair values with the exception of the following assets: Carrying amount Fair value Land Machine 56,000 30,800 Land was sold on 1 May 2023 for $77,000. $ 67,200 49,000 The cost of the Machine was $58,800 and had a further 5-year life as at the date of acquisition. Jim Ltd had reported a Contingent liability at 1 July 2020 in relation to claims by customers for damaged goods. Sky Ltd placed a fair value of $12,600 on these claims at acquisition date. This claim was settled on 1 April 2023 for $7,000. Additional information: a) On 1 March 2023, Jim Ltd purchased inventory from Sky Ltd for $25,200, recording a before-tax profit of $8,400. By 30 June 2023, Sky Ltd sold one third of these to external entities for $21,000. b) On 1 July 2022, Sky Ltd held inventories that had been sold to it by Jim Ltd in the previous year for $35,000, at a mark-up of 25%. The inventory was sold to external parties by the end 30 June 2023. c) On 1 January 2021, Jim Ltd sold an item of Equipment to Sky Ltd for $44,800. The Equipment original cost to Jim Ltd was $56,000 and had a carrying amount at the time of sale of $30,800. Equipment of this class is depreciated at 20% p.a. d) The group uses the partial goodwill method. During the 2021-2022 financial year, an impairment test was conducted and resulted in the recognition of impairment losses for goodwill of $7,000. e) All transfers from retained earnings to the general reserve by Jim Ltd were from post- acquisition earnings. On realisation of the business combination valuation reserve, a transfer is made to retained earnings on consolidation. g) The tax rate is 30%. +The financial statements of the two companies at 30 June 2023 are as follows: Sky Ltd S Revenues Expenses Net profit before tax Income tax expense 630,000 (462,000) Jim Ltd S 1,162,000 (868,000) 294,000 168,000 (98,000) (56,000) Net profit after tax 196,000 112,000 Retained earnings on 1 July 2022 210,000 175,000 406,000 287,000 Dividend paid (56,000) (28,000) Transfer to general reserve (14,000) (12,600) Retained earnings on 30 June 336,000 2023 246,400 Share capital 602,000 434,000 General reserve 70,000 67,200 Loan payable to Jim Ltd Deferred tax liabilities 56,000 21,000 5,600 133,000 36,400 EQUITY AND 1,218,000 789,600 Other liabilities TOTAL LIABILITIES Cash 298,000 210,000 Accounts receivable 91,000 Inventory 74,200 65,800 Deferred tax assets 22,400 15,400 Loan receivable from Sky Ltd 56,000 Investment in Jim Ltd 500,000 Non-current assets 232,400 442,400 1,218,000 789,600 TOTAL ASSETS Required: Prepare the consolidation journal entries (including NCI journals) for the Sky Ltd group for the year ended 30 June 2023. You must use the 3 Step method to calculate NCI and show all workings and round all numbers to the nearest whole dollar. a. Acquisition Analysis (add on the the line) BCVR Journal Entries (add on the the line) Account DR CR Pre-Acquisition Journal Entries(add on the the line) Account Intra-group Journal Entries(add on the the line) Account DR CR DR CR NCI Journal Entries (Workings on the next page)-(add on the the line) Account Step 2 workings Opening RE: less pre-acq, RE: Post acg RE: Adjustments Adj. post acg. RE: NCI allocation Step 3 workings Current year profit Adjustments Adj. profit: NCI allocation DR CR