Question
In: Accounting
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 ending 30 June, 2020 Preston Ltd records an after tax loss of $30,000. On 30 June 2020, Preston Ltd declares dividends of $10,000.
- Bundoora Ltd has a number of subsidiaries.
Required:
- Prepare the journal entries using both the cost and equity methods of accounting in context of parent entity for the investment in Preston Ltd for each of the years ended 30 June 2019 to 2020.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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...
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...
1. On 1 July 2014 Padma Ltd acquires 25 per cent of the issued capital of...
1.
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 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 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 2014 Stokes Ltd acquires 25 per cent of the issued capital of Cotter...
On 1 July 2014 Stokes Ltd acquires 25 per cent of the issued
capital of Cotter Ltd for a cash consideration of $120 000. At the
date of acquisition, the shareholders’ equity of Cotter Ltd is:
Share capital $150 000 Retained earnings $100 000 Total
shareholders’ equity $250 000 Additional information: ? On the date
of acquisition, buildings have a carrying amount in the accounts of
Cotter Ltd of $80 000 and a market value of $100 000. The buildings...
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...
Question 6 Week 12 (11 marks) On 1 July 2014 Padma Ltd acquires 25 per cent...
Question 6 Week 12 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...
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
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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...
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