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Prepare the journal entries in the records of Quick Buck

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Question - On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltd issued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of Eldorado Ltd. The costs of issuing the shares by Quick Buck Ltd cost $1,600.

At this date the statement of financial position of Eldorado Ltd was as follows:

Carrying amount Fair value Machinery $40,000 $67,000

Fixtures & fittings 60,000 68,000

Vehicles 35,000 35,000

Current assets 10,000 12,000

Current liabilities (16,000) (18,000)

Total net assets $129,000

Share capital (80,000 shares at $1.00 per share) $80,000

General reserve 20,000

Retained earnings 29,000

Total equity $129,000

Required - Prepare the journal entries in the records of Quick Buck Ltd at 1 July 2019 for the acquisition.

Reference no: EM132560393

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