Jam Ltd acquired all the equity in Cab Ltd on 31 December 20X4 for $370 000. At the control date, the equity of Cab was recorded as Paid-up capital of $250 000 and Retained profits $31 000. The purchase price was based on the agreed fair values of Cab's identifiable assets and liabilities on that date. The following items were not at fair value in Cab's financial statements on the control date. Carrying amount ($) Fair value ($) Inventory 31 000 40 000 Property (Cost of $350 000, Accumulated depreciation of $100 000) 250 000 300 000 Other information: • Both Cab and the group entity account for its property by the cost model, and apply straight-line depreciation to the property. The property in Cab Ltd is expected to have a remaining life of 20 years from 31 December 20X4, and no residual value. • Cab sold goods to Jam for $10,000 during FY20X5, the cost of these inventories was 7,000. All these inventories were still on hand by Jam by 31 December 20X5, the year-end. Required: Prepare all the necessary consolidation journal entries at 31 December 20X5, the year-end. (Using the provided journal entry template to enter your answer; workings/calculations or narrations are NOT required)

Jam Ltd acquired all the equity in Cab Ltd on 31 December 20X4 for $370 000. At the control date, the equity of Cab was recorded as Paid-up capital of $250 000 and Retained profits $31 000. The purchase price was based on the agreed fair values of Cab's identifiable assets and liabilities on that date. The following items were not at fair value in Cab's financial statements on the control date. Carrying amount ($) Fair value ($) Inventory 31 000 40 000 Property (Cost of $350 000, Accumulated depreciation of $100 000) 250 000 300 000 Other information: • Both Cab and the group entity account for its property by the cost model, and apply straight-line depreciation to the property. The property in Cab Ltd is expected to have a remaining life of 20 years from 31 December 20X4, and no residual value. • Cab sold goods to Jam for $10,000 during FY20X5, the cost of these inventories was 7,000. All these inventories were still on hand by Jam by 31 December 20X5, the year-end. Required: Prepare all the necessary consolidation journal entries at 31 December 20X5, the year-end. (Using the provided journal entry template to enter your answer; workings/calculations or narrations are NOT required)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Jenna Ltd acquired all the equity in Cooper Ltd on 31 December 20X4 for $450 000. At the control date, the equity of Cooper was recorded as paid-up capital of $300 000 and retained profits of $120 000. The purchase price was based on the agreed fair values of Cooper's identifiable assets and liabilities on that date. The following items were not at fair value in Cooper's financial statements on the control date. Inventories Plant (Cost of $400 000, Accumulated depreciation of $51 200) Carrying amount 20 000 348 800 Fair value 27 000 308 800 Other information: • All the inventories held by Cooper at the control date were sold during FY20X5. • Both Cooper and the group entity account for their plant by the cost model, and apply straight-line depreciation to the plant. The plant in Cooper Ltd is expected to have a remaining useful life of 10 years from 31 December 20X4, and no residual value. • Jenna sold goods to Cooper for $6 000 during FY20X5, the cost of these inventories was $3 500.…
On August 1, 20x1, German Corp. acquired all the identifiable assets and assumed the liabilities of Marasigan Corp. by paying cash of P6,000,00O. Marasigan Corp assets and liabilities have a book values of P7,000,000 and P2,200,000, respectively. The book value of assets and liabilities of Marasigan Corp. is equal to its fair value, except for inventory which is overvalued by P50,000; undervalued building of P400,000; and undervalued accounts payable of P20,000. German Corp. also paid general and administrative cost of P5,000; finder's fee of P6,000 and accountants fee of P25,00O. What is the total amount of goodwill after business combination?
DDaniel Ltd purchased 75 per cent of the issued capital and in the process gained control over Riccardo Ltd on 1 July 2020. The fair value of the net assets of Riccardo Ltd at purchase was represented by: Share Capital $3,760,000 Retained Earnings 1,320,000 Daniel Ltd paid cash consideration of $4 000 000 for Riccardo Ltd. During the period ended 30 June 2021, Riccardo Ltd paid management fees of $540 000 to Daniel Ltd and Riccardo Ltd had an operating profit of $980 000. Riccardo Ltd's opening retained earnings at the beginning of the period were $1 460 000. At the end of the period Riccardo Ltd declared a dividend of $90 000. There were no other inter-company transactions. Goodwill was determined to have been impaired by $19 000 during the period. Companies in the group accrue dividends when they are declared by subsidiaries.For the period ended 30 June 2021, what consolidation journal entries are required and what is the non-controlling interest?
The value of the net assets of Adom Plc as disclosed on the statement of financial position at 31 December 2018 was GHC800,000. The book values of the assets approximated their fair values except a property which had its fair value exceeding the book value by GHC40,000 and inventory with a book of GHC 60,000 and a net realizable value of GHC50,000. What is the fair valuation of the business?
On 1 July 2021, James Ltd acquired all the issued shares of Dean Ltd for $350,000. At this date, the financial statements of Dean Ltd showed the following: $ Share capital 270,000 Retained earnings 26,500 General Reserve 8,800 Total equity 305,300 Goodwill 25,000 At acquisition date, all the net identifiable assets and liabilities in Dean Ltd were recorded at amounts equal to their fair value except for: Asset Carrying amount ($) Fair Value ($) Inventories 15,000 18,000 Plant (cost $400,000) 210,000 220,000 The Plant was calculated to have a further life of 5 years, and was depreciated on a straight-line basis. All inventory was sold by 30 June 2020. Assume 30% tax rate Required: Prepare the acquisition analysis at 1 July 2021. Prepare the consolidation entries at acquisition date, 1 July 2021. Include narrations for each entry. Prepare the consolidation worksheet as at 1 July 2021. Prepare a Balance sheet for the reporting Group, James Ltd as at 1 July 2021 in narrative format.
Accounting Victoria Ltd purchased from Albert Ltd the following parcel of assets and liabilities representing a business. In exchange for these assets and liabilities, Victoria Ltd issued 50 000 shares, and the fair value of each share at the acquisition date is $5.50. After the transaction, Albert Ltd continued in business otherwise unaffected. Victoria Ltd recognised the brand ‘Bert’ that was not recognised in the record of Albert Ltd as it was an internally developed brand. It was calculated that this brand had a fair value of $110 000. Cost Carrying amount Fair value Accounts receivable 20 000 18 500 15 000 Machinery 120 000 100 000 86 000 Accounts payable 22 000 22 000 22 000 Additional information: Victoria Ltd also purchased all the share capital of Edward Ltd in the same financial year. Edward has 100 000 shares outstanding, and its net assets were at fair value. The cost of acquisition for Edward was $1 cash plus one share in…
This period, Amadeus Co. purchased its only available-forsale investment in the notes of Bach Co. for $83,000. The period-end fair value of these notes is $84,500. Amadeus records a a. Credit to Unrealized Gain—Equity for $1,500. b. Debit to Unrealized Loss—Equity for $1,500. c. Debit to Investment Revenue for $1,500. d. Credit to Fair Value Adjustment—Available-for-Sale for $3,500. e. Credit to Cash for $1,500.
On January 1, 20x1, Magnum Corp. acquired all the identifiable assets and assumed the liabilities of Colt Corp. The book values and fair values of Magnum and Colt Corp. prior to business combination are as follows: Magnum Colt Book value Fair Value Book Value Fair Value Cash 6,000,000 6,000,000 1,000,000 1,000,000 Accounts Receivable 500,000 470,000 120,000 105,000 Allowance for doubtful account (40,000) (20,000) Inventories 1,000,000 950,000 500,000 510,000 Land 3,000,000 3,200,000 1,200,000 1,300,000 Building 2,000,000 1,600,000 1,000,000 850,000 Accumulated Depreciation (500,000) (200,000) Total 11,960,000 12,220,000 3,600,000 Accounts Payable 3,000,000 2,500,000 1,000,000 1,000,000 Notes Payable 500,000 480,000 600,000 550,000 Ordinary share - P100 par 4,000,000 1,000,000 Share premium 1,200,000 200,000…
North Ltd acquired $100,000 of shares in South Ltd for trading purposes on 1 January 20X3. Transaction costs of $2,000 were incurred. The fair value of the shares at 31 December 20X3 was $120, 500. Choose the account names and calculate the amount that correctly account for this investment on 31 December 20X3 (amount for the credit entry is not required).
When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the following statement of financial position: Current Assets (net realizable value, P50,000) Land and Building (fair value, P240,000) Goodwill (fair value, 0) Total Assets Accounts Payable Mortgage Payable (secured by land & building) Ordinary share Accumulated profits Total Liabilities and Equity b. 56.25% c. 50.00% P 80,000 200,000 d. 43.75% 40,000 P320,000 P160,000 200,000 100,000 What percentage of their claims are the unsecured creditors likely to get? a. 100% (140,000) P320,000
On 1 July 2020 Harry Ltd purchased 70 per cent of the issued share capital of Wills Ltd and has control of Wills. The fair value of the net assets of Wills Ltd on that date was represented as follows: Share Capital $1,800,000 Retained 400,000 2,200,000 Harry Ltd paid cash consideration of $2,000,000 for Wills. Wills Ltd made an operating profit of $450,000, there were no intragroup transactions during the period ended 30 June 2021. Goodwill had been determined to have been impaired during the year by $45,000. What consolidation journal entries are required for the period and what is the non-controlling interest in equity as at 30 June 2021?
North Ltd acquired $100,000 of shares in South Ltd for trading purposes on 1 January 20X3. Transaction costs of $2,000 were incurred. The fair value of the shares at 31 December 20X3 was $120,500. Choose the account names and calculate the amount that correctly account for this investment on 31 December 20X3 (amount for the credit entry is not required). ENTER YOUR ANSWER IN "Amount" WHOLE NUMBERS WITH NO COMMAS OR DOLLAR SIGNS (EG $1,000,000 SHOULD BE SHOWN AS 1000000; -$1,000,000 SHOULD BE SHOWN AS -1000000). Dr Cr Financial asset Expense Cash Ple Gain in FV-OCI Financial liability Gain in FV-P&L ◆ Amount Amount not required of the question.