Prepare an acquisition analysis at July by ABC Ltd

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Reference no: EM132838198

Question - On 1 July 2019, ABC Ltd acquired all the issued shares of XYZ Ltd for $268,000. At this date, the equity of XYZ Ltd consisted of:

Share capital $150,000

General reserve 30,000

Retained earnings 50,000

All the identifiable assets and liabilities of XYZ Ltd were recorded at amounts equal to their fair values except for:

	Carrying amount	Fair value
Plant (cost 300,000)	250,000	280,000
Inventory	30,000	40,000

Plant can be used for another 5 years since the acquisition date. Inventory are sold by 30/6/2020. The tax rate is 30%.

Required -

PART A - Prepare an acquisition analysis at 1 July 2019 by ABC Ltd.

PART B - Prepare consolidation worksheet entries on 30 June 2020.

Reference no: EM132838198

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