Reference no: EM132371646
Corporate Accounting and Reporting Assignment -
For the following question provide all:
a) calculations
b) accounting standards
c) related journal entries
d) relevant explanations
Question - On 1 July 2019 Alma Ltd acquired 90% the issued shares of Davis Ltd for $598000. The equity of Davis Ltd at this date consisted of:
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Share capital
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209000
|
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Retained earnings
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90000
|
|
General reserve
|
72000
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All the identifiable assets and liabilities of Davis Ltd were recorded at amounts equal to their fair values at acquisition date except for the
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Account
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Cost
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Carrying Amount
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Fair value
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Further life-in Year
|
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Inventories
|
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$90,000
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$162,000
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|
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Land
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$181,000
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$326,000
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|
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Equipment
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$253,000
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$211,000
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$380,000
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4
|
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Fittings
|
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$20,000
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$20,000
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4
|
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Liabilities
|
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$50,000
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$50,000
|
|
All inventories on hand at 1 July 2019 are sold by 30 June 2020. Further life of the assets are listed on the above table. Alma Ltd use the partial goodwill method.
Tax rate: 30%.
Required -
1- Prepare the acquisition analysis at acquisition date.
2- Prepare the business combination valuation entries and pre-acquisition entry at acquisition date.
3- Prepare the journal entry to recognise NCI at acquisition date.
4- Prepare the consolidation worksheet entries at 30 June 2020. Assume a profit for Davis Ltd for the year ended 30 June 2020 of $12000.
5- Explain how the step 1 to 4 will change if the full goodwill method is used.
Note - The assignment must be typed, use Arial font, 12, make sure you do proper referencing, a WORD format file be submitted.