Conduct an acquisition analysis for bermuda

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Reference no: EM133137204

Question - On 1 November 2020, Bermuda Ltd acquired all the assets and liabilities (other than cash) of Triangle Ltd. The details on the assets and liabilities of Triangle Ltd were as follows:

 

Carrying Amount

Fair Value

Cash

30,000

30,000

Equipment

120,000

140,000

Accounts Receivable

25,000

25,000

Furniture

35,000

25,000

Accounts Payable

10,000

10,000

Income tax Payable

19,000

19,000

Annual Leave Payable

14,000

14,000

In addition to the above items Triangle Ltd had an internally generated brand name with a fair value of $75,000 that was not recognised in its accounts. The consideration Bermuda Ltd paid to Triangle Ltd was $80,000 cash and 20,000 shares. The fair value of each Bermuda Ltd share is $10. Bermuda Ltd paid $20,000 in acquisition related costs. Tax rate is 30%.

Required - Conduct an acquisition analysis for Bermuda.

Reference no: EM133137204

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