Question
In: Accounting
On 1 July 2016, Soff Ltd purchased a 20 per cent shareholding in Willaott Ltd for...
On 1 July 2016, Soff Ltd purchased a 20 per cent shareholding in Willaott Ltd for a cash consideration of $480 000. On the date of acquisition, the shareholders’ equity of Willaott Ltd is shown below: Share capital $1 900 000 Retained earnings $ 500 000 Total shareholder’s equity $2 400 000 Additional information: For the year ending 30 June 2017 Willaott Ltd recorded an after-tax profit of $280 000 and paid a dividend of $60 000 from the profit earned in the year ending 30 June 2017. For the year ending 30 June 2018, Willaott Ltd records an after-tax loss of $50 000. On 30 June 2018, Willaott Ltd revalued an item of equipment upwards by $80 000 (assume a 30% tax rate). Required: prepare the journal entries in the book of Soff using equity method.
Solutions
Expert Solution
Soff Ltd purchased a 20 per cent shareholding in Willaott Ltd for a cash consideration -
$2,400,000 x 20% = $480,000
Journal Entries -
Calculation of Comprehensive Income -
ekkarill92 answered 1 year agoRelated Solutions
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