Reference no: EM132371646

Corporate Accounting and Reporting Assignment -

For the following question provide all:

a) calculations

b) accounting standards

c) related journal entries

d) relevant explanations

Question - On 1 July 2019 Alma Ltd acquired 90% the issued shares of Davis Ltd for $598000. The equity of Davis Ltd at this date consisted of:

Share capital	209000
Retained earnings	90000
General reserve	72000

All the identifiable assets and liabilities of Davis Ltd were recorded at amounts equal to their fair values at acquisition date except for the

Account	Cost	Carrying Amount	Fair value	Further life-in Year
Inventories		$90,000	$162,000
Land		$181,000	$326,000
Equipment	$253,000	$211,000	$380,000	4
Fittings		$20,000	$20,000	4
Liabilities		$50,000	$50,000

All inventories on hand at 1 July 2019 are sold by 30 June 2020. Further life of the assets are listed on the above table. Alma Ltd use the partial goodwill method.  

Tax rate: 30%.

Required -

1- Prepare the acquisition analysis at acquisition date.

2- Prepare the business combination valuation entries and pre-acquisition entry at acquisition date.

3- Prepare the journal entry to recognise NCI at acquisition date.

4- Prepare the consolidation worksheet entries at 30 June 2020. Assume a profit for Davis Ltd for the year ended 30 June 2020 of $12000.

5- Explain how the step 1 to 4 will change if the full goodwill method is used.

Note - The assignment must be typed, use Arial font, 12, make sure you do proper referencing, a WORD format file be submitted.