Question
Alma Ltd. Acquires all the issued shares (ex div.) of Davis Ltd on 1 July 2018 for $2285382. At this time of date Davis Ltd.
Alma Ltd. Acquires all the issued shares (ex div.) of Davis Ltd on 1 July 2018 for $2285382. At this time of date Davis Ltd. recorded a dividend payable of $46000 and equity of the following
| Share capital | $800000 |
| Asset Revaluation surplus | $343000 |
| Retained Earnings | $274000 |
All the identifiable assets and liabilities of Davis Ltd. were recorded at amount equals to their fair values at acquisition date except for the following-
|
| Cost | Carrying amount | Fair value |
|
| Inventory |
| 343000 | 617000 |
|
| Land |
| 686000 | 1235000 |
|
| Vehicle | $960000 | 800000 | 1440000 | 4 years |
Out of inventory 90% was sold by 30th June,2019 and remaining sold by 30th June,2020.
In May 2019 Davis transferred $137000 from retained earnings at 1 July,2018 to Asset Revaluation Surplus. Tax rate 30%.
- Prepare acquisition analysis at 1 July,2018
- Prepare consolidation worksheet entries at 30 June,2019.
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Auditing Principle And Practice
Authors: Satyabrata Tripathy
1st Edition
9332519382, 9789332519381
