Advis appropriate consolidation journal entries

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Question 1: Based on the information provided below, advis appropriate consolidation journal entries for possible account adjustment or elimination.

Question 2: Reference appropriate accounting standards to explain the approach which needs to be taken for the adjusting journals.

Parent paid $110 000 on 30 June for all the shares of Subsidiary, whose equity at that date is share capital $72 000 and retained profits $28 000. However, the assets of Subsidiary are not all recorded at their fair value. Assume that all companies adopt the revaluation model under AASB 116. The discrepancies are:

                                   Carrying Amount                                Fair Value

                                          $                                                 $

Investments                        26 000                             54 000

Accounts receivable              14 000                             8 000

PPE                                     26 000                            12 000

Inventory                            70 000                             76 000

Franchise                                 Nil                              10 000

Reference no: EM132562831

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