Question
In: Accounting
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 have an estimated useful life of 10 years after 1 July 2014.
- For the year ending 30 June 2015 Jamuna Ltd records an after-tax profit of $90 000, from which it pays a dividend of $30 000.
- For the year ending 30 June 2016 Jamuna Ltd records an after-tax profit of $300 000, from which it pays a dividend of $150 000.
- Assume a tax rate of 30% is assumed
Required
Apply equity method of accounting to:
- Calculate the amount of goodwill at the date of acquisition
- Prepare the journal entries for the year ending 30 June 2015
- Prepare the journal entries for the year ending 30 June 2016
Solutions
Expert Solution
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ekkarill92 answered 1 year agoRelated Solutions
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 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...
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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...
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On 1 July, 2018 Bundoora Ltd acquires 25 per cent of the issued
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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
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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
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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
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For the year...
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.
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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
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Rule Ltd acquired all the issued capital of Book Ltd on 1 July 2014 for $1,500,000....
Rule Ltd acquired all the issued
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Share
Capital
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Retained
Earnings
$ 300,000
Additional information for
the year ended 30 June 2016:
Inter-company sales:
Rule Ltd to Book
Ltd
$11,000
Book Ltd to Rule
Ltd
$19,000
Unrealised profits in closing
inventory as at 30 June 2016 is $2,400 for goods sold by Book Ltd
to Rule Ltd and $1,200 for...
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