Reference no: EM133104696

Question - H Ltd acquired 80% shares of S Ltd on 29 December 20x3 for an agreed consideration of $2,000,000. The net assets of S Ltd on the date of acquisition were as follows:

Ordinary shares $1,000,000

General reserve $200,000

Retained earnings $300,000

H Ltd is preparing the consolidated statement of financial position at 31 December 20x3.

The retained earnings of H Ltd at reporting date were $660,000. The directors of H Ltd also decided to provide for impairment loss on goodwill by the amount of $120,000.

Required -

(i) Prepare the consolidation schedule on the calculation of goodwill for H Ltd.

(ii) Prepare the consolidation adjustment journal to eliminate the cost of business combination against the equities of the subsidiary.

(iii) Prepare the consolidation adjustment journal for goodwill impairment.