Solution-Prepare the journal entries in the records

Prepare the journal entries in the records

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Reference no: EM133006683

Question - On 1st December 2020, Grapefruit Ltd acquired the following assets and liabilities of Lime Ltd.

	Carrying Amount	Fair Value
Cash	20,000	20,000
Receivables	40,000	38,000
Inventory	27,000	42,000
Property, Plant and Equipment	135,000	157,000
Accounts Payable	(37,000)	(39,000)
Loan	(41,000)	(46,000)

In exchange for these assets and liabilities, Grapefruit Ltd issued 100,000 shares that have been issued for $1.20 per shares but at 1st December 2020, had a fair value of $6.50 per share.

Required -

I. Prepare the acquisition analysis using IFRS 3.

II. Prepare the journal entries in the records of the Grapefruit Ltd account to acquire the assets and liabilities of Lime Ltd.

III. Prepare the acquisition analysis assuming that the fair value of the shares was $8.30 per share.

Reference no: EM133006683

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Prepare the journal entries in the records

Reference no: EM133006683

Reference no: EM133006683

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