Prepare the acquisition analysis of Sunshine Ltd at July

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Question - On 1 July 2019, Sunshine Ltd acquired all of the assets and liabilities of Rain Ltd. In exchange for these assets and liabilities, Sunshine Ltd issued 300 000 shares that at date of issue had a fair value of $2 per share. Costs of issuing these shares amounted to $1600 and management costs associated amounted to $3 100. The asset and liabilities of Rain Ltd at 1 July 2019 were as follows: Carrying amount Fair value Assets Cash at Bank $60,000 $60,000 Bills Receivable $33,000 $40,000 Inventory $66,000 $75,000 Plant $350,000 245,000 Accumulated depreciation - plant ($96,000) Patent $220,000 $330,000 Liabilities Accounts Payable (91,000) ($90 000) Mortgage ($55,000) ($80,000).

Required -

A. Prepare the acquisition analysis of Sunshine Ltd at 1 July 2019.

B. Prepare the journal entries of the acquisition in the records of Sunshine Ltd at 1 July 2019.

Reference no: EM132803779

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