Reference no: EM131209782

Assignment 

Question 1

Consolidation of wholly owned subsidiary, pre-acquisition equity and BCVR entries for assets and liabilities

Lisa Ltd acquired all the issued shares of Kam Ltd on 1 January 2016 for $88 000. At this date the equity of Kam Ltd consisted of:

                                    Share capital                            $          100 000

                                    General reserve                                                50 000

                                    Retained earnings                                10 000

   All the identifiable assets and liabilities of Kam Ltd were recorded at amounts equal to their fair values except for:

                                                            Carrying amount                      Fair value

Fixtures & Fittings (cost $70 000)        $50 000                                               $60 000

Inventory                                             10 000                                     20 000

Of the inventory on hand at 1 January 2016, 90% was sold by 30 June 2016. The remainder was all sold by 30 June 2017. The Fixtures & Fittings was considered to have a further 2-year life with benefits to be received equally in each of those years.  There were no records in the books for a provision of legal claim worth 15,000 and patents of 90,000. These were reflected at fair value. The tax rate is 30%.

Required

Prepare the consolidated worksheet entries for the consolidated financial statements prepared by Lisa Ltd at 30 June 2016.

Show acquisition analysis calculation, BCVR entries and Pre-acquisition entries for 30.6.16

­Question 2

The following information has been extracted from the accounting records of Samoa Ltd for the year ended 30 June 2016:

		Debit	Credit
	Sales Dividends paid Cost of sales Finance costs Distribution costs Transfer from general reserve Marketing costs Administrative costs Proceeds from sale of plant and machinery Carrying amount of plant and machinery	$  10 000 3 500 000 100 000 200 000   66 000 99 000   40 000	$5 000 000         33 000     80 000

Tax rate is 30%.

Required

Prepare a statement of profit or loss and other comprehensive income for Samoa Ltd, for the year ended 30 June 2016, and notes to the accounts in compliance with AASB 101. Please classify expenses by function.