Solution-Find the pre-acquisition entry on june would

Find the pre-acquisition entry on june would include a

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Reference no: EM132618290

Brass Devil Limited purchased 100% of the shares in Voodoo Sonic Limited on 1 July 2020, for a cash consideration of $ 750,000. On that date, the equity balances of Voodoo Sonic Limited were:

Share Capital $360,000

Retained Earnings $140,000

All of the identifiable net assets were recorded at their fair value in the books of Voodoo Sonic, except for: Provision for legal claims (contingent liability) - Estimated claim recorded in the note $10,000; Fair value $20,000

During the financial year ending 30 June 2024, the provision for loan guarantee was settled with a cash payment of $15,000.

Problem 1: Assuming no other transfers have taken place from Business Combination Valuation Reserve since 1 July 2020 and that the tax rate is 30%, the pre-acquisition entry on 30 June 2025 would include a:

Select one:

Option a. Dr Retained Earnings (1/7/24) $ 126,000

Option b. Dr Retained Earnings (1/7/24) $ 154,000

Option c. Dr BCVR $ 236,000

Option d. Dr Share capital $ 346,000

Option e. None of the other options.

Reference no: EM132618290

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Find the pre-acquisition entry on june would include a

Reference no: EM132618290

Reference no: EM132618290

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