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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

Land

686000

1235000

Vehicle

$960000

800000

1440000

4 years

Out of inventory 90% was sold by 30th June,2019 and remaining sold by 30th June,2020.

In May 2019 Davis transferred $137000 from retained earnings at 1 July,2018 to Asset Revaluation Surplus. Tax rate 30%.

  1. Prepare acquisition analysis at 1 July,2018
  2. Prepare consolidation worksheet entries at 30 June,2019.

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Expert Solution

ekkarill92 answered 2 years ago
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