On 1 July 2015, Ava Ltd acquired all the issued capital of Tracy Ltd for a cash payment of $55000 when the equity of Tracy Ltd was: Share Capital. $26000 Retained Earnings $5000 Revaluation surplus...

On 1 July 2015, Ava Ltd acquired all the issued capital of Tracy Ltd for a cash payment of $55000 when the equity of Tracy Ltd was:

Share Capital. $26000
Retained Earnings $5000
Revaluation surplus $4000

At 1 July 2015, all assets of Tracy Ltd were fairly valued. Directors determined that goodwill would be impaired by 10% in 2016, 2017 and 2018. Assume that there are no intra-group transactions or deferred tax consequences from 1 July 2015 to 30 June 2018. Tax rate is 30%. Reporting date is 30 June. Ava has investment in other entities.

(a) Prepare an acquisition analysis and determine the amount of goodwill or gain on bargain purchase at acquisition. (Show all workings)

(b) Prepare the acquisition elimination journal entries for consolidation as at 30 June 2018. (Number consolidation journal entries by 1, 2, 3....etc; Narration are required) (Show all workings out)