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