Prepare the consolidated worksheet entries at June

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Question - Partial Goodwill Method - Green Ltd acquired 90% of the shares (ex div.) of Yellow Ltd on 1 July 2013 for $250 000. At this date, the equity of Yellow Ltd consisted of:

Share capital

$140,000

General Reserve

25,000

Retained earnings

70,000

At acquisition date all the identifiable assets and liabilities of Yellow Ltd were recorded at amounts equal to fair value except the following:

 

Carrying Amount

Fair value

Inventory

30,000

45,000

Patent

85,000

90,000

Plant (cost 100,000)

80,000

90,000

Plant was depreciated at 10% using straight line method. Patent has definite life and existing goodwill of $5000 was recorded.

At 30 June 2019, the equity of Yellow Ltd consisted of:

Share capital

$140,000

General Reserve

40,000

Retained earnings

90,000

During the 2019-20 year Yellow Ltd recorded a profit of $30,000.

Required - Prepare the consolidated worksheet entries at 30 June 2020 for Green Ltd assuming: Green Ltd adopts the partial goodwill method:

(1) Calculate Acquisition Analysis?

(2) Prepare all consolidation journal entries for 30/6/2020?

Reference no: EM132847271

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