On 1 July 2012,City Ltd Acquired 65 Per Cent of the Issued

On 1 July 2012,City Ltd acquired 65 per cent of the issued capital of Town Ltd for $850 000 when the fair value of the net assets of Town Ltd was $1.2 million (share capital $1 million and retained earnings $0.2 million) .On 30 June 2015 City Ltd purchased a further 25 per cent of Town's issued capital for $300 000.The net assets of Town Ltd were not stated at fair value in the accounts,which are summarised as follows: $$\begin{array} { | l | r | } \hline \text { Assets } & \\\hline \text { Cash } & 100000 \\\hline \text { Debtors } & 350000 \\\hline \text { Inventory } & 970000 \\\hline \text { Plant and equipment (net) } & 1020000 \\\hline \text { Liabilities } & \\\hline \text { Creditors } & 280000 \\\hline \text { Loans } & 850000 \\\hline \text { Shareholders' funds } & \\\hline \text { Share capital } & 1000000 \\\hline \text { Retained earnings } & 310000 \\\hline\end{array}$$ The fair value of the plant and equipment is $1 090 000 at year end.Goodwill has been deemed not to have been impaired.There were no inter-company transactions during the period.
What are the consolidation journal entries required for the period ended 30 June 2015?
(Ignore the tax effect of the revaluation.)

A)
$$\begin{array} { | r | l | r | r | } \hline \mathrm { Dr } & \text { Share capital } & 650000 & \\\hline \mathrm { Dr } & \text { Retained earnings } & 130000 & \\\hline \mathrm { Dr } & \text { Goodwill } & 70000 & \\\hline \mathrm { Cr } & \text { Investment in Town Ltd } & & 850000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Plant and equipment } & 70000 & \\\hline \mathrm { Cr } & \text { Goodwill } & & 70000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Share capital } & 250000 & \\\hline \mathrm { Dr } & \text { Retained earnings } & 77500 & \\\hline \mathrm { Cr } & \text { Reserve in additional equity } & & 27500 \\\hline \mathrm { Cr } & \text { Investment in Town Ltd } & & 300000 \\\hline\end{array}$$
B)
$$\begin{array} { | r | l | r | r | } \hline \mathrm { Dr } & \text { Share capital } & 650000 & \\\hline \mathrm { Dr } & \text { Retained earnings } & 130000 & \\\hline \mathrm { Dr } & \text { Goodwill } & 70000 & \\\hline \mathrm { Cr } & \text { Investment in Town Ltd } & & 850000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Share capital } & 250000 & \\\hline \mathrm { Dr } & \text { Retained earnings } & 77500 & \\\hline \mathrm { Cr } & \text { Reserve in additional equity } & & 27500 \\\hline \mathrm { Cr } & \text { Investment in Town Ltd } & & 300000 \\\hline\end{array}$$
C)
$$\begin{array} { | r | l | r | r | } \hline \mathrm { Dr } & \text { Share capital } & 650000 & \\\hline \mathrm { Dr } & \text { Retained earnings } & 130000 & \\\hline \mathrm { Dr } & \text { Goodwill } & 70000 & \\\hline \mathrm { Cr } & \text { Investment in Town Ltd } & & 850000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Plant and equipment } & 70000 & \\\hline \mathrm { Cr } & \text { Asset revaluation reserve } & & 70000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Share capital } & 250000 & \\\hline \mathrm { Dr } & \text { Asset revaluation reserve } & 17500 & \\\hline \mathrm { Dr } & \text { Retained earnings } & 77500 & \\\hline \mathrm { Cr } & \text { Reserve in additional equity } & & 45000 \\\hline \mathrm { Cr } & \text { Investment in Town Ltd } & & 300000 \\\hline\end{array}$$
D)
$$\begin{array} { | r | l | r | r | } \hline \mathrm { Dr } & \text { Plant and equipment } & 70000 & \\\hline \mathrm { Cr } & \text { Asset revaluation reserve } & & 70000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Share capital } & 900000 & \\\hline \mathrm { Dr } & \text { Asset revaluation reserve } & 17500 & \\\hline \mathrm { Dr } & \text { Retained earnings } & 207500 & \\\hline \mathrm { Cr } & \text { Goodwill } & & 25000 \\\hline \mathrm { Cr } & \text { Investment in Town Ltd } & & 1150000 \\\hline\end{array}$$