1 July 2019 Gail Ltd acquired all issued shares of Ray Ltd for $90000. The Ray Ltd financial records show followings. Share capital 10000 @ 5 $50000 General Reserve 25000 Retained Earnings 15000 All assets and liabilities of Ray Ltd recorded at amount equal to fair value at that date. On January 2020, Ray Ltd transferred $ 5000 from general reserve existing at 1 July 2019 to retained earnings. a) Preapare pre-acquisition entries at 1 July 2019 b) Preapare pre-acquisition entries at 30 June 2020

1 July 2019 Gail Ltd acquired all issued shares of Ray Ltd for $90000. The Ray Ltd financial records show followings. Share capital 10000 @ 5 $50000 General Reserve 25000 Retained Earnings 15000 All assets and liabilities of Ray Ltd recorded at amount equal to fair value at that date. On January 2020, Ray Ltd transferred $ 5000 from general reserve existing at 1 July 2019 to retained earnings. a) Preapare pre-acquisition entries at 1 July 2019 b) Preapare pre-acquisition entries at 30 June 2020

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 19E

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