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Determine goodwill on bargain purchase at acquisition

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Reference no: EM132613861

Thor Ltd acquired its 80% interest in Loki Ltd on 30 June 2019 for $890 000, when all assets of Loki Ltd were fairly valued. Share capital and reserves of Loki Ltd are:

                                        At 30 June 2019                  At 30 June 2020

Share Capital                    $500,000                     $500,000

Retained earnings                   $425,000                  $600,000

The management of Thor Ltd measures any non-controlling interest in Loki Ltd at fair value.

Question A. Show acquisition analysis at 30 June 2019, to determine goodwill or gain on bargain purchase at acquisition.

Question B. Prepare consolidation/elimination journals at 30 June 2020.

Reference no: EM132613861

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