On 1 July 2015 Sarah Ltd acquires all the shares in Jane Ltd for $857,000 cash The financial statements of Jane Ltd as at 1 July 2015 shows the following: Retained earnings 164,000 Share capital 184,000 The tax rate is 30% At the date of acquisition all the net assets of Jane Ltd are at fair value except for the following: Carrying Amount Fair Value Land $188,000 $231,000 Equipment (cost $211,000) $197,000 $267,000 Calculate and enter the amount of goodwill for the acquisition analysis in the answer bloc
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On 1 July 2015 Sarah Ltd acquires all the shares in Jane Ltd for $857,000 cash The financial statements of Jane Ltd as at 1 July 2015 shows the following:
Retained earnings 164,000
Share capital 184,000
The tax rate is 30%
At the date of acquisition all the net assets of Jane Ltd are at fair value except for the following:
| Carrying Amount | Fair Value | |
| Land | $188,000 | $231,000 |
|
Equipment (cost $211,000) |
$197,000 | $267,000 |
Calculate and enter the amount of
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- Arya Ltd acquired 25% of the voting shares of Brya Ltd on 1 July 2014 for $80,000. At the date of acquisition the shareholders equity of Brya is as follows: Share Capital 220,000 Retained earnings 100,000 320,000 All assets are recorded at their fair value The following information relates to Brya Ltd: Profit /loss after tax as of 30/6/15 are $60,000, dividend paid $20,000, ARR balance $2,000. Required: (a) Prepare the equity accounting journals at 1 July 2014 and 30 June 2015 assuming that Arya does not prepare consolidated financial statements. (b) Calculate Value of equity for Brya Ltd.On 1 July 2014 Chloe Ltd acquired all the shares in Lola Ltd for $955,000. At this date the shareholders’’ equity of Lola Ltd consisted of Share capital $225,000 General reserve $196,000 Retained earnings 1/7/2014 $205,000 At 1 July 2014, the carrying amounts of all identifiable assets of Lola Ltd were equal to fair value with one exception. An item of Plant has a cost of $125,000 and an accumulated depreciation of $52,000 but a fair value of $145,000. At 1 July 2014 the plant has a useful life of 7 years and is depreciated on the straight line basis. Lola Ltd uses the cost basis to measure Plant. An impairment loss of $88,000 relating to goodwill arising from the acquisition of Lola Ltd was recognised during the year ended 30 June 2015. Calculate and enter the amount of goodwill in the answer block below: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 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 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 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…
- 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…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 000Retained earnings $300 000Total 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 Please answer: 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…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)…
- 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 000Retained earnings $300 000Total shareholders’ equity 750 000Additional 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 assumedHlayisani Ltd acquired 60% of the voting shares of the Mashele Ltd on 31 January 2014 for R65 000 when the items of equity in the books of Mashele Ltd on that date were retained income of R45 000, revaluation surplus of R10 000 and share capital of R58 000. Calculate the amount of goodwill/ (gain on bargain purchase) realized by Hlayisani Ltd on 31 January 2014. 7 300 -- 99- 10On 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 capitalRetained earningsTotal shareholders’ equityAdditional information$450 000 $300 000 750 000• 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 assumedRequiredApply equity method of accounting to:(a) Calculate the amount of goodwill at the date of acquisition (3 marks) (b) Preparethejournalentriesfortheyearending30June2015(3marks) (c) Prepare the…
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