Question
1: (12 Marks) On 1 July 2019, Anglo Ltd took control of the assets and liabilities of Jim Ltd. At this date the statement of
1: (12 Marks)
On 1 July 2019, Anglo Ltd took control of the assets and liabilities of Jim Ltd. At this date the statement of financial position of Jim 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 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 Anglo Ltd at 1 July 2019 in each of the following situations, assuming the costs of issuing the shares by Anglo Ltd cost $1600.
Anglo Ltd issued 80 000 shares having a fair value of $2.00 per share in exchange for the net assets of Jim Ltd.
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Financial Accounting Textbook For Students And Researchers
Authors: Mukhiddin Kalonov
1st Edition
6206174077, 978-6206174073
