Required: a) Prepare all necessary journal entries to record the above acquisition. (Using the provided journal entry template to enter your answer; workings/calculations or narrations are required.) b) If the parcel of assets and liabilities does not represent a business, list any accounts that would be recorded in a) but should not be recognized anymore in Thomas Ltd's record. Explain the reason.
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- 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…Nick Ltd acquired 100% of the issued capital of Wing Ltd on 1 July 2011 for $270000. The statements of financial position of the companies immediately after the acquisition are provided below. All assets have been reported following fair value. Statement of Financial Position For the year ended 1 July 2011 Nick Ltd Wing Ltd Shareholders' equity Share capital General reserve Retained earnings Total shareholders' equity 450,000 45,000 140,000 635,000 180,000 25,000 20,000 225,000 Assets Current assets Cash at Bank Accounts Receivable 50,000 20,000 100.000 170,000 30,000 10,000 25.000 65,000 Inventory Non-current assets Investment in Wing Ltd Land Plant & Equipment 270,000 250,000 100,000 620.000 790.000 200,000 80.000| 280.000 345.000 Total assets Liabilities Current liabilities Accounts Payable Interest Payable 40,000 10,000 15.000 L.000 55,000 18,000 Non-current liabilities Bank loan Total liabilities Net assets 100,000 155,000 635,000 102,000 120,000 225,000 Required 1. Calculate…
- Proton Company acquired all of the outstanding ordinary shares of an acquiree paying P7,400,000 cash. The carrying amount and fair value of the assets and liabilities of the acquiree were: Carrying Amount Fair Value P P Accounts receivable 1,080,000 975,000 Inventory 1,620,000 2,400,000 Property and equipment 5,400,000 6,975,000 Accounts payable (1,800,000) (1,800,000) Bonds payable (2,700,000) (2,475,000) Net assets acquired P3,600,000 P6,075,000 What amount of goodwill should be reported at year-end? O P3,800,000 PO O P1,325,000 P2,300,000E Company Ltd, a reporting entity, purchases all the issued shares of D Company Pty Ltd for $2,100,000. The net assets of D Company Pty Ltd at the date of acquisition consist of land $2,500,000 and a liability of $400,000 with these values representing their respective fair values. E Company Ltd will record the acquisition in its separate accounting records as follows: O a. Dr. Investment in D Company Pty Ltd $2,100,000 Cr. Issued Capital $2,100,000 O b. None of these options is correct O. Dr. Investment in D Company Pty Ltd $2,100,000 Cr. Cash $2,100,000 O d. Dr. Land $2,500.000 Cr. Liability $400,000 Cr. Cash $2,100,0006. Tulip Company purchased the net assets of another entity for P2,000,000. On the sate of the transaction, the acquire had P800,000 of liabilities The assets of the acquiree at fair value were $1,900,000 for current assets and P1,600,000 for noncurrent assets. What is the amount of gain on bargain purchase? a. P 700,000 b. P-700,000 c. P 800,000 d. P-800,000
- Mokwena Limited acquired 48% investment in Masibi Limited at R100 000. At the date of acquisition, which is 31 March2016, Masibi Limited’s statement of financial position showed the following balances:Non-current assets R692 000Current assets R44 000Non-current liabilities R268 000Current liabilities R218 000Mokwena Limited applies equity accounting for all its investments in associates and joint ventures. The financial year-endfor Mokwena Limited is on 31 March of each year.What amount will be recorded as investment in associate in Mokwena Limited’s statement of financial position as at 31March 2016?On 30 June 2021 Parent Ltd acquired 100 per cent of the shares in Subsidiary Ltd for a cost of $1,000,000. The account balances of the two entities at the date of acquisition were: Parent Ltd ($) Subsidiary Ltd ($) Cash 200,000 100,000 Accounts receivable 260,000 180,000 Inventory 400,000 220,000 Property, plant and equipment 800,000 700,000 Accumulated depreciation (240,000) (180,000) Land 600,000 200,000 Investment in Sydney Ltd 1,000,000 - Accounts payable 220,000 140,000 Loans payable 400,000 380,000 Share capital 1,800,000 400,000 Retained earnings 600,000 300,000 Additional information: All assets of Subsidiary Ltd were fairly valued at acquisition except the land, which had a fair value of $280,000. The tax rate is 30 per cent. Required: (a) Prepare the consolidation journal entriesJam Ltd acquired all the equity in Cab Ltd on 31 December 20X4 for $360 000. At the control date, the equity of Cab was recorded as Paid-up capital of $260 000 and Retained profits of $30 000. 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. Inventory Property (Cost of $250 000, Accumulated depreciation of $40 000) Carrying amount ($) 32 000 210 000 Fair value ($) 24 000 252 000 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 21 years from 31 December 20X4, and no residual value. Cab sold goods to Jam for $5,000 during FY20X5, the cost of these inventories was 4,000. All these inventories were still on hand by Jam by 31 December 20X5, the year-end. . Required: Prepare…
- Sailor Berhad acquired all the shares in Mon Berhad on 31 December 2022 for a cost of RM900,000. The statement of financial poistion of both companies for the year ended 31 December 20221 were as follows: Non-current assets Investment in Mon Berhad at cost Current assets Ordinary share Retained earnings Current liabilities Sailor Berhad RM'000 1,600 900 380 2,880 1,000 1,580 300 2,880 Mon Berhad RM'000 750 300 1,050 500 300 250 1,050 Required: Explain by way of calculation on how to prepare the consolidated statement of financial position for the group as at 31 December 2022.Mokwena Limited acquired 48% investment in Masibi Limited at R100 000. At the date of acquisition, which is 31 March2016, Masibi Limited’s statement of financial position showed the following balances:Non-current assets R692 000Current assets R44 000Non-current liabilities R268 000Current liabilities R218 000Mokwena Limited applies equity accounting for all its investments in associates and joint ventures. The financial year-endfor Mokwena Limited is on 31 March of each year.What is Mokwena Limited’s share of the net assets in Masibi Limited?Select one:a.R250 000b.R353 280c.R120 000d.R100 000The Dali Group consisted of Dali Ltd, the parent, and its subsidiary, Gleeson Pty Ltd. On 31 December 20X6, Dali gaincd control of Drysdale by purchasing all its share capital for $250000. The purchase was based on the following fair values for Drysdale assets, which differ from their carrying amounts: Accounts receivable 21 400 Inventory 31000 Patents (not recorded by Drysdale) 15000 Equipment assets 170000 Financial statements of the three companics at the control date are shown in the workshecet below. At this date: • Gleeson has made a $400 payment to Dali, which has not yet reccived it. • Dali has shipped inventory goods to Gleeson invoiced at $900. Drysdale has not yet recived these goods or recorded them, but they have been included in the above fair value measure of the inventory. Drysdale applies the cost model to equipment. (e) Complete the worksheet below up to the sum column. (b) Prepare data adjustments in alternative general journal form with appropriate commentaries.…