On June 30 2012 Oak Ltd acquired all the shares in Acorn Ltd for $775,000 cash. At the date of acquisition the shareholders funds of Acorn Ltd were as follows:Shareholders' Funds – Acorn Ltd Share Capital 335,000Revaluation Surplus 105,000Retained Earnings 195,000Total Shareholders' Funds $635, 000Additional Information • At the date of acquisition all identifiable net assets of Acorn Ltd were recorded at fair value with the exception of land, which was determined to have a fair value of $435,000. The land was recorded in the books of Acorn Ltd at $400,000 and had not been previously revalued.• Intra-group sales for the current financial year were as follows: Oak Ltd to Acorn Ltd $400,000
Acorn Ltd to Oak Ltd $100,000• At the 30 June 2015 10% of the stock sold to Acorn Ltd from Oak Ltd remained unsold in the closing inventory of Acorn Ltd. This total stock had originally cost Oak Ltd $270,000.• At 1 July 2014 the opening inventory of Oak Ltd includes stock purchased from Acorn Ltd for $150,000. The stock has originally cost Acorn Ltd$110,000.• On 1 July 2014 Acorn Ltd sold an item of equipment to Oak Ltd for $135,000. Acorn Ltd had acquired the equipment on 1 July 2013 at a cost of $160, 000. The equipment when purchased had an estimated useful life of 5 years with no residual value.• During the current financial year Acorn Ltd paid $60,000 in dividends to Oak Ltd. These were paid from post-acquisition profits.• During the year ended 30 June 2015 Oak Ltd charged Acorn Ltd $40,000 in consulting fees.• Assume a tax rate of 30%Required:Prepare the consolidation entries for the financial year ended 30 June 2015 (narrations not required).Your answer must clearly indicate the most appropriate account to be adjusted by indicating at the end of the journal entry whether the account is (A), (L), (R), (E) or (OE).