Reference no: EM132371917
Corporate Accounting Assignment -
For the following case provide all:
a) calculations
b) accounting standards
c) related journal entries
d) relevant explanations
Question - On 1 July 2019 Alma Ltd acquired 92% the issued shares of Davis Ltd for $414000. The equity of Davis Ltd at this date consisted of:
|
Share capital
|
145000
|
Asset revaluation surpluss
|
62000
|
|
Retained earnings
|
50000
|
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
|
|
$62,000
|
$112,000
|
|
|
Land
|
|
$124,000
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$223,000
|
|
|
Furniture
|
$174,000
|
$145,000
|
$261,000
|
5
|
|
Fittings
|
|
$20,000
|
$20,000
|
5
|
|
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 $8000.
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.
Attachment:- Corporate Accounting Assignment File.rar