Patent for the production of a new product

Assignment Help Accounting Basics

Reference no: EM131003985

On 1 January 20X5 Invigilator Enterprises acquired 100 per cent of the shares of Lemma Company.

The separate condensed statements of financial position immediately after the acquisition appeared as shown below (all amounts in €):

	*Invigilator*	*Lemma*
*Assets* Intangible assets	-	2 000
Property, plant and equipment (net)	490 000	80 000
Investment in Lemma	600 000	-
Inventories	230 000	360 000
Trade and other receivables	400 000	240 000
Total assets	1 720 000	682 000
*Financing*
Share capital	1 000 000	200 000
Retained earnings	140 000	100 000
Provisions	20 000	30 000
Current liabilities	560 000	352 000
Total equity and liabilities	1 720 000	682 000

Additional information (at acquisition date):

(a) Lemma owns a patent for the production of a new product. Lemma did not recognize the patent in its financial statements. The estimated fair value of the patent amounts to €80 000.

(b) The fair value of Lemma's main corporate offices is €130 000 (net book value of €50 000).

(d) On 1 January 20X5, Invigilator Enterprises still has to pay an invoice (€100 000) for services rendered by Lemma Company in December 20X4.

Required:

(a) Prepare the consolidated statement of financial position of the Invigilator Group as at 1 January 20X5.

(b) Prepare the consolidated statement of financial position of the Invigilator Group as at 1 January 20X5, assuming that the invest- ment in Lemma represents only 90 per cent of the outstanding shares of Lemma Company (apply the partial goodwill method).

Reference no: EM131003985

Questions Cloud

Managers to better develop their business idea : Follow APA format for structure. An APA template is attached here. Support your essay with 2 to 3 credible references beyond the course materials. Please note Wikipedia, Investopedia and similar websites are not credible academic references.

Strengths and limitations of the dsm-5 : An explanation of what you perceive to be two strengths and two limitations of the DSM-5 and why you consider each as such

Find the marginal utility for each additional topping : Would another topping on a pizza always increase the utility derived from eating it? Consider Maria's total util- ity curve for pizza toppings as shown in the table. Find the marginal utility for each additional topping and draw a diagram indicati..

Construct a diagnosis for the given case : Construct a diagnosis for the case "Depression in a Native American Elder" described on page 10 of your text. Be sure to fully justify the diagnosis with appropriate references to the Learning Resources, and include necessary descriptors

Patent for the production of a new product : Lemma owns a patent for the production of a new product. Lemma did not recognize the patent in its financial statements. The estimated fair value of the patent amounts to €80 000.

Identify a source of business financing : Should a start-up organization invest in an IS immediately? Why or why not

Will demand for any related products be affected : See if you can find some examples of changes in new goods, services, govern- ment policies, or institutional arrangements that work by reducing the time price of a product. How do you think that change will affect the demand for the product? Will ..

Programming formulation that minimizes average travel time : Write a programming formulation that minimizes the average travel time for each person - Determine the best model type(s) for each(linear, nonlinear, or integer), and then building the model(s) to meet the needs of the scenarios.

Consolidated statement of financial position : Draw up a consolidated statement of financial position at 31 December 20X6.

User Account

All Pages