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Complete the acquisition analysis as at date of acquisition

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Reference no: EM132835849

On 1 July 2019 Mickey Ltd acquired the shares of Mouse in exchange for 10000 shares with fair value of $3 each. On the date of acquisition, the equity sections of the balance sheets of Mickey Ltd and Mouse Ltd showed the following respectively:

Mickey Ltd Extract from the Balance Sheet as at 1 July 2020

Share capital           $65000
Retained earnings     $20000
Cash at bank          $15000
Land                        $40000
Investment in Leela Ltd $30000                          

Mouse Ltd Extract from the Balance Sheet as at 1 July 2020

Share capital  $15000
Retained earnings $10000
Cash at bank $5000
Inventories (fair value is $4000) $2000
Patent( fair value is $15000) $18000

The Company tax rate is 30%.

Required:

Problem 1. Complete the acquisition analysis as at the date of acquisition.

Problem 2. Prepare the adjusting journal entries for the consolidation worksheet at 1 July 2020.

Problem 3. Complete the consolidation worksheet as at 1 July 2020.

Reference no: EM132835849

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