Reference no: EM133201767
Case study:
On 1 July 2020, Bowie Ltd acquired all the shares of David Ltd for $500,000 on an ex-div. basis. On this date, the equity and liabilities of David Ltd included the following balances:
Share capital
|
$100,000
|
General reserve
|
25,000
|
Retained earnings
|
145,000
|
Dividend Payable -ex div basis
|
8,000
|
At acquisition date, all the identifiable assets and liabilities of David Ltd were recorded at amounts equal to fair value except for:
|
Carrying amount
|
Fair value
|
Useful life at acquisition date
|
Land
|
700,000
|
900,000
|
Sold 30/4/2022
|
Plant and equipment (cost $500,000)
|
$400,000
|
$404,000
|
5 years
|
Trade mark
|
50,000
|
60,000
|
Indefinite life
|
Motor vehicle (cost $90,000)
|
60,000
|
75,000
|
5 years
|
Inventories
|
2,000
|
12,000
|
100% sold externally during the year ended 30/6/2021
|
Any valuation reserves created are transferred on consolidation to retained earnings when assets are sold or fully consumed.
Additional information
1. On 1 July 2021, Bowie Ltd has on hand inventory worth $34 000, being transferred from David Ltd in June 2021. The inventory had previously cost David Ltd $30 000.
2. On 1 January 2022, David Ltd sold an item of plant with a carrying amount of $115 000 to Bowie Ltd for $125 000. Bowie Ltd treated this item as inventory. The item was still on hand at the end of the year. David Ltd applied a 20% depreciation rate to this plant.
3. On 1 March 2022, David Ltd acquired $9 000 inventory from Bowie Ltd. This inventory originally cost Bowie Ltd $5000. 25% of this inventory has been sold to external parties for $35,000.
4. On 1 January 2021, Bowie Ltd sold office equipment to David Ltd for $2,000. This office equipment had originally cost Bowie Ltd $5 000 and had a carrying amount at the time of sale of $1,000. Both entities charge depreciation at a rate of 20% p.a.
5. On June 2021 Bowie Ltd gave David Ltd a loan of $425 000.David Ltd has not made any repayments on the loan. Interest is charged at 15% per annum on the loan and the last interest payment was made on 31 March 2022. Both companies have recorded accruals at year end.
The corporate tax rate is 30%.
Required:
1. Prepare the acquisition analysis as at 1 July 2020 for the Bowie Ltd Group.
2. Prepare the consolidation worksheet entries as at 30 June 2022 for the Bowie Ltd Group.
3. Prepare the consolidation worksheet for the Bowie Ltd Group as at 30 June 2022, using the attached template.
Prepare a consolidated Balance sheet using account format, for the Bowie Ltd Group as at 30 June 2022. Please ensure all sub-headings and sub-totals are included.
Find applied acl carry forward
: Company XYZ is a CCPC. This year, had an opening RDTOH of $20,000; Cdn ABI Income was $200,000; Cdn Dividend Income (non-connected) was $10,000; Cdn Taxable Cap
|
Create a strategic hr planning document
: Create a Strategic HR Planning document (employment law included) Staffing Compensation Training and Development Performance Evaluation
|
Describe the role of information and record clerk
: Welcoming a new employee into your organization is always a happy occasion. After all, the work of recruiting interviewing, selecting, background checks, etc. i
|
Decision Analysis Relevance Paper
: Decision Analysis Relevance Paper - Successful business analysis requires understanding environments, industries, and organizations
|
Prepare the acquisition analysis
: On 1 July 2020, Bowie Ltd acquired all the shares of David Ltd for $500,000 on an ex-div. basis. On this date, the equity and liabilities of David Ltd included
|
Define each stage in the product life cycle
: Define each stage in the product life cycle: introduction, growth, maturity, and decline. Explain marketing strategy used and name a product currently in stage.
|
Define the real exchange rate
: Define the real exchange rate and explain how the nominal exchange rate relates to the real exchange rate in the long-run. Boston College. ECON 3372.
|
Story of buddhist monk
: San Diego State University-There is a story of a Buddhist monk who was on a ship with a maniac who was killing everyone on board.
|
What is a virtual global management team
: What is a virtual global management team? How do the members interact? Discuss the advantages and the challenges faced by these teams.
|