Prepare the acquisition analysis at acquisition date

Reference no: EM132374621

Assignment

For the following case provide all:

a) Calculations

b) Accounting standards

c) Related journal entries

d) Relevant explanations

On 1 July 2019 Alma Ltd acquired 92% the issued shares of Davis Ltd for $492000 . The equity of Davis Ltd at this date consisted of:

Share capital	172000
Asset revaluation surplus	74000
Retained earnings	59000

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

Account	Cost	Carrying	Fair value	Further life in year
Inventories		$74,000	$133,000
Land		$148,000	$266,000
Vehicle	$206,000	$172,000	$310,000	4
Fitting		$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 uses the partial goodwill method.

Required

1- Prepare the acquisition analysis at acquisition date.

2- Prepare the business combination valuation entries and pit-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 510000.

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

Attachment:- Assignment details.rar

Reference no: EM132374621

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