Lillee Ltd acquired 60% of the issued share capital of Thompson Ltd on 1 February 20X1.Thompson Ltd's shareholders equity (all at fair value) at that date was as follows:

\begin{array}{llcc}&000s \\ \text { Paid up capital } &\$4000\\ \text { Retained profits } &\$1000\\ \text { Asset revaluation reserve } &\$2000\\\end{array}

If Lillee Ltd paid $8 000 000 for this acquisition what is the elimination entry if consolidated financial statements were prepared on 2 February 20X1? Under the full method the fair value of NCI is assessed as being $3 200 000.
A)

\begin{array} { l r r } \text { Accounts } & \text { Debit } \$ \mathbf { 0 0 0 } & \text { Credit } \$ \mathbf { 0 0 0 } \\\text { Paid up capital } & 2400 & \\\text { Retained profits } & 600 & \\\text { Asset revaluation reserve } & 1200 & \\\text { Goodwill } & 4200 & \\\text { Investment in Thompson Ltd } & & 8000 \\\text { NCI reserve } & & 400\end{array}

\begin{array} { l r r } \text { Accounts } & \text { Debit } \$ \mathbf { 0 0 0 } & \text { Credit } \$ \mathbf { 0 0 0 } \\\text { Paid up capital } & 4000 & \\\text { Retained profits } & 1000 & \\\text { Asset revaluation reserve } & 2000 & \\\text { Goodwill } & 4200 & \\\text { Investment in Thompson Ltd } & & 8000 \\\text { NCI reserve } & & 3200\end{array}

\begin{array} { l r r } \text { Accounts } & \text { Debit } \$ \mathbf { 0 0 0 } & \text { Credit } \$ \mathbf { 0 0 0 } \\\text { Paid up capital } & 4000 & \\\text { Retained profits } & 1000 & \\\text { Asset revaluation reserve } & 2000 & \\\text { Investment in Thompson Ltd } & & 7000\end{array}

\begin{array} { l r r } \text { Accounts } & \text { Debit } \$ \mathbf { 0 0 0 } & \text { Credit } \$ 000 \\\text { Paid up capital } & 2400 & \\\text { Retained profits } & 600 & \\\text { Asset revaluation reserve } & 1200 & \\\text { NCI reserve } & 3200 & \\\text { Investment in Thompson Ltd } & & 10200\end{array}

Kerry Ltd Owns 70% of James Ltd

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