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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 $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: (a) Calculate the amount of goodwill at the date of acquisition (b) Prepare the journal entries for the year ending 30 June 2015 (c) Prepare the journal entries for the year ending 30 June 2016
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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 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...
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, 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...
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...
Question 6 (11 marks) (Note this question is from the Week 12 Tutorial) The following information...
Question 6 (Note this question is from the Week 12
Tutorial) The following information relates to Moon Light Ltd. (a)
At the beginning of the accounting period the company has a salary
payable liability of $200 and at the reporting date a salary
payable of $360. During the year the salary expense shown in the
income statement was $400. (b) At the beginning of the accounting
period the company has property, plant and equipment (PPE) with a
carrying amount of...
Question 6 - Week 12 (11 marks) Richard is a retired solicitor. His wife Tracy is...
Question 6 - Week 12
Richard is a retired solicitor. His wife Tracy is a retired
school teacher. Both wish to remain active and they invest in a
gift shop that is to be managed by their daughter Alice, who is
aged 35. They form a partnership of three called “Alice's Gift
Shop”. Richard and Tracy contributed $40,000 each to fund the
purchase of the shop. The partnership agreement provides: • Both
Richard and Tracy are to receive interest at...
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