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Create the journal entries in the records of quick buck ltd

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Reference no: EM132568319

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:

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

Reference no: EM132568319

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