Hill Ltd Acquired an 80 Per Cent Interest in Dale

Hill Ltd acquired an 80 per cent interest in Dale Ltd on 1 July 2014 for a cash consideration of $1 200 000.At that date the shareholders' funds of Dale Ltd were: $$\begin{array} { | l | r |} \hline \text { Share capital } & 900000 \\\hline \text { Retained earnings } & \underline { 400000 } \\\hline & \underline {1300000} \\\hline\end{array}$$ The assets of Dale Ltd were recorded at fair value at the time of the purchase.
On 1 July 2015 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:
$$\begin{array} { | l | r |} \hline \text { Share capital } & 900000 \\\hline \text { Retained earnings } & \underline {600000} \\\hline & \underline {1500000} \\\hline\end{array}$$ Impairment of goodwill amounted to $35 600,of which $16 000 related to the year ended 30 June 2016.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 2016?

A)
$\text { Elimination and impairment entries: } \\\begin{array} { | c | l | r | r | } \hline \mathrm { Dr } & \text { Share capital } & 720000 & \\\hline \mathrm { Dr } & \text { Retained earnings } & 320000 & \\\hline \mathrm { Dr } & \text { Goodwill } & 160000 & \\\hline \mathrm { Cr } & \text { Investment in Dale Ltd } & & 1200000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Share capital } & 180000 & \\\hline \mathrm { Dr } & \text { Retained earnings } & 120000 & \\\hline \mathrm { Dr } & \text { Reserve in additional equity } & 36000 & \\\hline \mathrm { Cr } & \text { Investment in Dale Ltd } & & 336000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Retained earnings beginning } & 19600 & \\\hline \mathrm { Dr } & \text { Goodwill impairment expense } & 16000 & \\\hline \mathrm { Cr } & \text { Accumulated impairment losses-goodwill } & & 35600 \\\hline\end{array}$
B)
${ \text { Elimination and impairment entries: } }\\\begin{array} { | c | l | r | r | } \hline \mathrm { Dr } & \text { Share capital } & 900000 & \\\hline \mathrm { Dr } & \text { Retained earnings } & 600000 & \\\hline \mathrm { Dr } & \text { Goodwill } & 36000 & \\\hline \mathrm { Cr } & \text { Investment in Dale Ltd } & & 1536000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Goodwill impairment expense } & 3600 & \\\hline \mathrm { Cr } & \text { Accumulated impairment losses-goodwill } & & 3600 \\\hline\end{array}$
C)
$\text { Elimination and impairment entries: } \\\begin{array} { | c | l | r | r | } \hline \mathrm { Dr } & \text { Share capital } & 720000 & \\\hline \mathrm { Dr } & \text { Retained earnings } & 320000 & \\\hline \mathrm { Dr } & \text { Goodwill } & 160000 & \\\hline \mathrm { Cr } & \text { Investment in Dale Ltd } & & 1200000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Share capital } & 180000 & \\\hline \mathrm { Dr } & \text { Retained earnings } & 120000 & \\\hline \mathrm { Cr } & \text { Investment in Dale Ltd } & & 300000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Non-monetary assets } & 36000 & \\\hline \mathrm { Cr } & \text { Investment in Dale Ltd } & & 36000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Retained earnings beginning } & 16000 & \\\hline \mathrm { Dr } & \text { Goodwill impairment expense } & 16000 & \\\hline \mathrm { Cr } & \text { Accumulated impairment losses-goodwill } & & 32000 \\\hline\end{array}$
D)
$\text { Elimination and impairment entries: }\\\begin{array} { | c | l | r | r | } \hline \mathrm { Dr } & \text { Share capital } & 900000 & \\\hline \mathrm { Dr } & \text { Retained earnings } & 600000 & \\\hline \mathrm { Dr } & \text { Goodwill } & 36000 & \\\hline \mathrm { Cr } & \text { Investment in Dale Ltd } & & 1536000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Retained earnings beginning } & 16000 & \\\hline \mathrm { Dr } & \text { Goodwill impairment expense } & 19600 & \\\hline \mathrm { Cr } & \text { Accumulated impairment losses-goodwill } & & 35600 \\\hline\end{array}$

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