Prepare the consolidation journal entries for uh ltd

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Reference no: EM132994512

On 31 December 2016, UH Ltd acquired 80% of the shares in LH Ltd. On that date, the equity of LH Ltd comprised:

The Subsidiary, LH Ltd 000

Share capital 700

Retained earnings 400

Equity 1,100

At acquisition, the book value of the assets and liabilities of LH Ltd were at fair value, except for some non-depreciable assets (included under 'Other non-current assets' and considered to be part of net identifiable assets) that had a book value of zero and where UH assessed their fair value to be $190,000. There has been no change to the assessed value of these assets since acquisition.

Goodwill impairment

At the most recent balance date (31 December 2020), the returns from LH Ltd were not as high as expected. The directors of UH Ltd considered that acquired goodwill had been impaired by $100,000.

Problem 1: Prepare the consolidation journal entries (include narrations) for UH Ltd and its controlling entity for the period 31 December 2020.

Reference no: EM132994512

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