Solution-Prepare consolidation journal entry at date of

Prepare consolidation journal entry at date of acquisition

Assignment Help Financial Accounting

Reference no: EM13912532

Nick Ltd acquired 100% of the issued capital of Wing Ltd on 1 July 2011 for $270000. The statements of financial position of the companies immediately after the acquisition are provided below. All assets have been reported following fair value.

Statement of Financial Position For the year ended 1 July 2011
	Nick Ltd	Wing Ltd
	$	$
Shareholders' equity
Share capital	450,000	180,000
General reserve	45,000	25,000
Retained earnings	140,000	20,000
Total shareholders' equity	635,000	225,000
Assets
Current assets
Cash at Bank	635,000	225,000
Accounts Receivable	20,000	10,000
Inventory	100,000	25,000
Non-current assets
Investment in Wing Ltd	270,000	----
Land	250,000	200,000
Plant & Equipment	100,000	80,000
	620,000	280,000
Total assets	790,000	345,000
Liabilities
Current liabilities
Accounts Payable	40,000	10,000
Interest Payable	15,000	8,000
Non-current liabilities
Bank loan	100,000	102,000
Total liabilities	155,000	120,000
Net assets	635,000	225,000

Required

1. Calculate Goodwill (show workings)

2. Prepare consolidation journal entry at the date of acquisition.

3. Prepare consolidation worksheet.

4. Prepare the consolidated statement of financial position as at 1 July 2011 (immediately after the acquisition).

Reference no: EM13912532

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Prepare consolidation journal entry at date of acquisition

Reference no: EM13912532

Reference no: EM13912532

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