Question
Aman limited acquired all the issued shares of Bent Ltd on 1st July 2019 for $2,180,125. At this date, the equity of the Bent Ltd
Aman limited acquired all the issued shares of Bent Ltd on 1st July 2019 for $2,180,125. At this date, the equity of the Bent Ltd stated below.
Sharecapital
$765,112
Retained earnings
$325,524
General reserve
$260,421
All the identifiableassetsand liabilities of Bent Ltd were recorded at amounts equals to their fair values at acquisition date except for the following.
Account
Cost
Carrying amount
Fair value
Further useful life
Inventories
$327,591
$589,156
Land
$655,183
$1,179,583
Plant
$915,478
$763,110
$1,373,852
7
The applicable Tax rate is 30%
A.Prepare the acquisition analysis at 1st July 2019.
B.Recordthe business combination and valuation reserve (BCVR) adjusting entry assuming 96% of the inventories were sold by 30th June 2020.
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