Prepare the consolidated worksheet entries

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Question - On 1 July 2018, Xero Ltd acquired all the share capital of MYOB Ltd for $725,000 cum div. At this date, MYOB Ltd.'s equity and dividend payable were:

Share capital - 200,000 shares $375,000

General reserve 105,000

Retained earnings 95,000

Dividend Payable 25,000

All identifiable assets and liabilities of MYOB Ltd were recorded at fair value as at 1 July 2018 except for the following:

 

Carrying amount

Fair value

Inventory

$98,000

$108,000

Land

165,000

195,000

Equipment (cost $130,000)

90,000

100,000

The equipment is expected to have a further 10-year life. All the inventory taken over on 1 July 2018 was sold by 30 June 2019. The tax rate is 30%. On 30 June 2019, the directors of MYOB Ltd decided to transfer $ 52 500 from the general reserve to retained earnings.

REQUIRED -

A. Prepare the acquisition analysis in relation to Xero Ltd acquisition of MYOB Ltd.

B. Prepare the consolidated worksheet entries for the consolidated financial statements prepared by Xero Ltd at 30 June 2019. The dividend payable at 1 July 2018 was paid by MYOB Ltd on 1 January 2019 and treated.

Reference no: EM132886412

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