Hill Ltd Acquired an 80 Per Cent Interest in Dale

question 13

Multiple Choice

Hill Ltd acquired an 80 per cent interest in Dale Ltd on 1 July 2004 for a cash consideration of $1,200,000. At that date the shareholders' funds of Dale Ltd were:

The assets of Dale Ltd were recorded at fair value at the time of the purchase.
On 1 July 2005 Hill Ltd purchased the remaining 20 per cent of the issued capital of Dale Ltd for a cash consideration of $336,000. At this date the fair value of the net assets of Dale Ltd were represented by:

Impairment of goodwill amounted to $35,600; $16,000 of which related to the year ended 30 June 2006. There were no inter-company transactions. What are the consolidation entries to eliminate the investment in the subsidiary and account for goodwill for the period ended 30 June 2006?