Question
In: Accounting
The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000...
The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000 cash and 800,000 shares each valued at $1.50. The summary statement of the financial position of the subsidiary company immediately following the acquisition is: Fair value of assets acquired $2,640,000 Fair value of liabilities acquired $720,000 Total shareholders’ equity of the subsidiary company $800,000 Retained earnings of the subsidiary company $1,120,000
Required: (a) Pass the necessary journal entry to record the acquisition (b) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition (c) Pass the necessary consolidation entry to eliminate the subsidiary by the parent company (d) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition if the purchase consideration paid was $1,000,000 cash and 400,000 shares each valued at $1.50
Solutions
ekkarill92 answered 2 years agoRelated Solutions
The P Ltd acquires all issued capital of the S Ltd for a consideration of $1,000,000...
The P Ltd acquires all issued capital of the S Ltd for a
consideration of $1,000,000 cash and 800,000 shares each valued at
$1.50. The summary statement of the financial position of the
subsidiary company immediately following the acquisition is: Fair
value of assets acquired $2,640,000 Fair value of liabilities
acquired $720,000 Total shareholders’ equity of the subsidiary
company $800,000 Retained earnings of the subsidiary company
$1,120,000 Required:
(a) Pass the necessary journal entry to record the acquisition
(b) Determine...
The Parent company acquires all issued capital of the subsidiary company for a consideration of $1000000...
The Parent company acquires all issued capital of the subsidiary
company for a consideration of $1000000 cash and 800000 shares each
valued at $1.25. The summary statement of financial position of the
subsidiary company immediately following the acquisition is: Fair
value of assets acquired $2640000 Fair value of liabilities
acquired $720000 Total shareholders’ equity of the subsidiary
company $800000 Retained earnings of the subsidiary company
$1120000 Required: (i) Pass the necessary journal entry to record
the acquisition (ii) Determine the...
Patron Ltd acquires all the issued capital of Questro Ltd for a cash payment of $8...
Patron Ltd acquires all the issued capital of Questro Ltd for a
cash payment of $8 250 000 on 30 June 2020. At this date, all
assets were fairly valued except for land, which had a fair value
of
$1 950 000 (carrying amount of $1 500 000). The tax rate is 30%.
At date of acquisition the share capital and reserves of Questro
Ltd were as follows:
Share capital 3 000 000
Retained earnings 4 200 000
7 200...
On 1 July, 2018 Bundoora Ltd acquires 25 percent of the issued capital of Preston Ltd...
On 1 July, 2018 Bundoora Ltd acquires 25 percent of the issued
capital of Preston Ltd for a cash consideration of $150,000. At the
date of acquisition, the share capital and retained earnings of
Preston Ltd are as follows: Share capital $120,000 and Retained
earnings $480,000 (Total Shareholders’ equity $600,000). Additional
information: For the year ending 30 June 2019 Preston Ltd records
an after-tax profit of $50,000 from which it pays a dividend of
$30,000. For the year...
On 1 July 2014 Padma Ltd acquires 25 percent of the issued capital of Jamuna Ltd...
On 1 July 2014 Padma Ltd acquires 25 percent of the issued
capital of Jamuna Ltd for a cash consideration of $360 000.
At the date of acquisition, the shareholders’ equity of Jamuna Ltd
is:
Share capital $450 000
Retained earnings $300 000
Total shareholders’ equity 750 000
Additional information
• On the date of acquisition, buildings have a carrying amount
in the accounts of Jamuna Ltd of $240 000 and a
market value of $300 000. The buildings have...
Alma Ltd. Acquires all the issued shares (ex div.) of Davis Ltd on 1 July 2018...
Alma Ltd. Acquires all the issued shares (ex div.) of
Davis Ltd on 1 July 2018 for 1762626. At this time of date Davis
Ltd. recorded a dividend payable of 35000 and equity of the
following –
Share capital
617000
General reserve
264000
Asset revaluation surplus
212000
All the identifiable assets and liabilities of Davis
Ltd. were recorded at amount equals to their fair values at
acquisition date except for the following-
Cost
Carrying amount
Fair value
Further life
Inventory...
Alma Ltd. Acquires all the issued shares (ex div.) of Davis Ltd on 1 July 2018...
Alma Ltd. Acquires all the issued shares (ex div.) of Davis Ltd
on 1 July 2018 for $2285382. At this time of date Davis Ltd.
recorded a dividend payable of $46000 and equity of the following
–
Share capital
$800000
Asset Revaluation surplus
$343000
Retained Earnings
$274000
All the identifiable assets and liabilities of Davis Ltd. were
recorded at amount equals to their fair values at acquisition date
except for the following-
Cost
Carrying amount
Fair value
Inventory
343000
617000...
On 1 July 2014 Padma Ltd acquires 25 per cent of the issued capital of Jamuna...
On 1 July 2014 Padma Ltd acquires 25 per cent of the issued
capital of Jamuna Ltd for a cash consideration of $360 000. At the
date of acquisition, the shareholders’ equity of Jamuna Ltd is:
Share capital $450 000 Retained earnings $300 000 Total
shareholders’ equity 750 000 Additional information • On the date
of acquisition, buildings have a carrying amount in the accounts of
Jamuna Ltd of $240 000 and a market value of $300 000. The
buildings...
On 1 July, 2018 Bundoora Ltd acquires 25 per cent of the issued capital of Preston...
On 1 July, 2018 Bundoora Ltd acquires 25 per cent of the issued
capital of Preston Ltd for a cash consideration of $150,000. At the
date of acquisition, the share capital and retained earnings of
Preston Ltd are as follows: Share capital $120,000 and Retained
earnings $480,000 (Total Shareholders’ equity $600,000). Additional
information: For the year ending 30 June, 2019 Preston Ltd
records an after tax profit of $50,000 from which it pays a
dividend of $30,000. For...
On 1 July, 2018 Bundoora Ltd acquires 25 per cent of the issued capital of Preston...
On 1 July, 2018 Bundoora Ltd acquires 25 per cent of the issued
capital of Preston Ltd for a cash consideration of $150,000.
At the date of acquisition, the share capital and retained
earnings of Preston Ltd are as follows: Share capital $120,000 and
Retained earnings $480,000 (Total Shareholders’ equity
$600,000).
Additional information:
For the year ending 30 June, 2019 Preston Ltd records an after
tax profit of $50,000 from which it pays a dividend of
$30,000.
For the year...
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