Reference no: EM131821980
Problem
Consolidation of wholly owned subsidiary, pre -acquisition equity and BCVR entries for assets and liabilities.
Lisa Ltd acquired all the issued shares of Kam Ltd on 1 January 2016 for $88,000. At this date the equity of Kam Ltd consisted of
Share Capital $100,000
General Reserves $50,000
Retained Earnings $10,000
All the identifiable assets and liabilities of Kam Ltd were recorded at amounts equal to their fair values except for:
Carrying amount Fair Value
Fixtures & Fittings (cost $70 000) $50,000 $60,000
Inventory $10,000 $20,000
Of the inventory on hand at 1 January 2016, 90% was sold by 30 June 2016. The remainder was all sold by 30 June 2017. The Fixtures & Fittings was considered to have a further 2 -year life with benefits to be received equally in each of those years. There were no records in the books for a provision of legal claim worth 15,000 and patents of 90,000. These were reflected at fair value.
Required:
Prepare the consolidated worksheet entries for the consolidated financial statements prepared by Lisa Ltd at 30 June 2016.
Show acquisition analysis calculation, BCVR entries and Pre-acquisition entries for 30.6.16.
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