Solution-Explain whether there are non-controlling interests

Explain whether there are non-controlling interests

Reference no: EM133182585

Question - Lanark Ltd is stationary retail business in the Melbourne market. Recently, Lanark Ltd expand the market to office equipment market and decided to take over Shibuca Ltd, one of medium size business specialize in renting office equipment.

The acquisition consisted in Lanark Ltd acquiring the 100% of Shibuca Ltd shares for a consideration of $600,000 on 1 July 2021.

At that date of the statement of financial position of Shibuca Ltd is as follows:

Statement of financial position 1 July 2021

Cash 15,000 Loans 300,000

Account receivables 45,000

Account payables 20,000

Inventory 90,000

Buildings 405,000 Share Capital 300,000

Plant 150,000 Retained Earnings 85,000

Moreover, you have this additional information on the company: Shibuca Ltd has internally generated its brand name "Shibuca" whose fair value is estimated being $50,000;

RMIT Classification: Trusted

All the assets and liabilities of Shibuca Ltd are fairly valued at the date of the acquisition.

Required -

a) Explain whether there are non-controlling interests on Shibuca Ltd.

b) Identify if any goodwill arises from the acquisition and calculate (if any) its amount.

c) Considering that no intra-group transactions occurred between Lanark Ltd and Shibuca Ltd in the financial year, provide the journal entries for the elimination of the investment in the subsidiary to prepare the consolidated financial statement on 30 June 2022.

Reference no: EM133182585

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Explain whether there are non-controlling interests

Reference no: EM133182585

Reference no: EM133182585

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