Reference no: EM132566896
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.