{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-28T05:34:20-04:00", "answer_date": "2024-06-28 05:34:20", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4245742", "url": "\/study-help\/questions\/ben-ltd-operates-a-number-of-supermarkets-with-an-emphasis-4245742", "question_creation_date_js": "2024-06-28T05:34:20-04:00", "question_creation_date": "Jun 28, 2024 05:34 AM", "meta_title": "[Solved] Ben Ltd operates a number of supermarkets | SolutionInn", "meta_description": "Answer of - Ben Ltd operates a number of supermarkets with an emphasis on the supply of quality produce The operations of Sam Ltd | SolutionInn", "meta_keywords": "ben,ltd,operates,number,supermarkets,emphasis,supply,quality,produce,operations,sam,primarily", "question_title_h1": "Ben Ltd operates a number of supermarkets with an emphasis on the supply of quality produce The operations of Sam Ltd are primarily in the", "question_title": "Ben Ltd operates a number of supermarkets with an emphasis on the", "question_title_for_js_snippet": "Ben Ltd operates a number of supermarkets with an emphasis on the supply of quality produce The operations of Sam Ltd are primarily in the fine fruit market Believing that the acquisition of Sam Ltd would enable Ben Ltd to expand its supply of quality produce to its customers, Ben Ltd commenced actions to acquire the shares of Sam Ltd On 1 July 2013, Ben Ltd acquired all the issued shares ( cum div ) of Sam Ltd for $130 000 At this date the equity of Sam Ltd consisted of Share capital$150 000 Reserves10 000 Retained earnings30 000 On 1 July 2013, Sam Ltd had recorded a dividend payable of $6000 and goodwill of $5000 (net of accumulated impairment losses of $7000) The dividend was paid in August 2013 In the previous year's annual report Sam Ltd had reported the existence of a contingent liability for damages based upon a lawsuit by a customer who had slipped on some fallen fruit in one of the Stores operated by Sam Ltd Ron Ltd calculated that this liability had a fair value of $9 000 Sam Ltd also had some customer databases that were not recorded as assets but Ron Ltd placed affair value of $6000 on these items Sam Ltd believed that the databases had a future life of 4 years All of the identifiable assets and liabilities of Sam Ltd were recorded at amounts equal to their fair values except for the following Carrying amount Fair value Plant (cost $120 000)$94 000$96 000 Land80 00095 000 Inventory20 00026 000 The plant had an expected remaining useful life of 5 years The land was sold by Sam Ltd in February 2015 All inventories were sold by 30 June 2014 In February 2016, Sam Ltd transferred $3000 of the reserves on hand at 1 July 2013 to retained earnings The remaining $2000 was transferred in February 2017 The court case involving the damages sought by the customer was settled in May 2017 Sam Ltd was required to pay $7 000 to the customer Required Prepare the consolidation worksheet entries for the preparation by Sam Ltd of its consolidated financial statements at 30 June 2017 At 1 July 2013 Net fair value of identifiable assets and liabilities of Sam Ltd ($150000 $10000 $30000) equity $2000 (1 30 ) (Plant) $15000 (1 30 ) (Land) $6000 (1 30 ) (Inventory) $6000 (1 30 ) (Data bases) $9000 (1 30 ) (Damages payable) $5000 (Goodwill) 199000 Consideration transferred $130000 $6000 (Dividend receivable) $124000 Goodwill Recorded goodwill $5000 Unrecorded goodwill I don't know how to deal with this questions ", "question_description": "

Ben Ltd operates a number of supermarkets with an emphasis on the supply of quality produce<\/strong><\/p>

The operations of Sam Ltd are primarily in the fine fruit market. Believing that the acquisition of Sam Ltd would enable Ben Ltd to expand its supply of quality produce to its customers, Ben Ltd commenced actions to acquire the shares of Sam Ltd. On 1 July 2013, Ben Ltd acquired all the issued shares (cum div.<\/em>) of Sam Ltd for $130 000. At this date the equity of Sam Ltd consisted of:<\/strong><\/p>

<\/p>

Share capital$150 000<\/strong><\/p>

Reserves10 000<\/strong><\/p>

Retained earnings30 000<\/strong><\/p>

<\/p>

On 1 July 2013, Sam Ltd had recorded a dividend payable of $6000 and goodwill of $5000<\/strong><\/p>

(net of accumulated impairment losses of $7000). The dividend was paid in August 2013. In the<\/strong><\/p>

previous year's annual report Sam Ltd had reported the existence of a contingent liability for<\/strong><\/p>

damages based upon a lawsuit by a customer who had slipped on some fallen fruit in one of the<\/strong><\/p>

Stores operated by Sam Ltd. Ron Ltd calculated that this liability had a fair value of $9 000.<\/strong><\/p>

Sam Ltd also had some customer databases that were not recorded as assets but Ron Ltd placed<\/strong><\/p>

affair value of $6000 on these items. Sam Ltd believed that the databases had a future life of<\/strong><\/p>

4 years.<\/strong><\/p>

All of the identifiable assets and liabilities of Sam Ltd were recorded at amounts equal to their<\/strong><\/p>

fair values except for the following:<\/strong><\/p>

<\/p>

Carrying amount Fair value<\/strong><\/p>

Plant (cost $120 000)$94 000$96 000<\/strong><\/p>

Land80 00095 000<\/strong><\/p>

Inventory20 00026 000<\/strong><\/p>

<\/p>

The plant had an expected remaining useful life of 5 years. The land was sold by Sam Ltd in<\/strong><\/p>

February 2015. All inventories were sold by 30 June 2014.<\/strong><\/p>

In February 2016, Sam Ltd transferred $3000 of the reserves on hand at 1 July 2013 to retained earnings. The remaining $2000 was transferred in February 2017.<\/strong><\/p>

The court case involving the damages sought by the customer was settled in May 2017.<\/strong><\/p>

Sam Ltd was required to pay $7 000 to the customer.<\/strong><\/p>

<\/p>

Required<\/u><\/strong><\/p>

<\/p>

Prepare the consolidation worksheet entries for the preparation by Sam Ltd of its consolidated<\/strong><\/p>

financial statements at 30 June 2017.<\/strong><\/p>

<\/p>

At 1 July 2013 : <\/p>

Net fair value of identifiable assets <\/p>

and liabilities of Sam Ltd ($150000 + $10000 + $30000) - equity<\/p>

+ $2000 (1-30%) (Plant)<\/p>

+ $15000 (1-30%) (Land)<\/p>

+ $6000 (1-30%) (Inventory)<\/p>

+ $6000 (1-30%) (Data bases)<\/p>

- $9000 (1-30%) (Damages payable)<\/p>

- $5000 (Goodwill)<\/p>

= 199000<\/p>

Consideration transferred = $130000 - $6000 (Dividend receivable)<\/p>

= $124000<\/p>

Goodwill = ?????<\/p>

Recorded goodwill = $5000??<\/p>

Unrecorded goodwill =??<\/p>

<\/p>

I don't know how to deal with this questions..<\/p>", "transcribed_text": "", "related_book": { "title": "Entrepreneurial Finance", "isbn": "1305968352, 978-1337635653, 978-1305968356", "edition": "6th edition", "authors": "J. Chris Leach, Ronald W. Melicher", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/1482.jpg", "uri": "\/textbooks\/entrepreneurial-finance-6th-edition-1482", "see_more_uri": "" }, "free_related_book": { "isbn": "0805861998", "uri": "\/textbooks\/chronic-headaches-1st-edition-978-0805861990-269355", "name": "Chronic Headaches", "edition": "1st Edition" }, "question_posted": "2024-06-28 05:34:20", "see_more_questions_link": "\/study-help\/questions\/business-finance-2024-September-13", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/how-does-the-expectancy-theory-explain-the-effect-of-selfdoubt", "description": "How does the expectancy theory explain the effect of self-doubt on employee motivation?", "stars": 3 }, { "url": "\/study-help\/coaching-supervision-a-practical-guide-for-supervisees\/burnout-and-boredom-are-two-negative-patters-of-employee-wellbeing-1980285", "description": "Burnout and boredom are two negative patters of employee well-being at work. What (if possible) preventive strategies can organizations use?", "stars": 3 }, { "url": "\/voss-manufacturing-company-established-the-following-standard-price-and-cost", "description": "Voss Manufacturing Company established the following standard price and cost data. Sales price ................. $30 per unit Variable manufacturing cost .......... $14 per unit Fixed manufacturing...", "stars": 3 }, { "url": "\/study-help\/questions\/in-the-equation-y-a-bx-the-y-9853167", "description": "In the equation, y = a + bx, the y represents: O a. The total fixed cost. O b. The variable cost per unit of activity. c. The total mixed cost. O d. The level of activity. Clear my choice", "stars": 3 }, { "url": "\/study-help\/questions\/the-information-below-represents-values-for-the-various-market-participants-4920194", "description": "The information below represents values for the various market participants. C = $25 + 0.75Yd I g = $50 G = $70 X = $140 M = $130 Assuming that the full-employment level of output is $500: what kind...", "stars": 3 }, { "url": "\/study-help\/questions\/explain-why-you-chose-the-specific-article-how-is-it-984608", "description": "Explain why you chose the specific article? How is it relevant to the current health care landscape? Discuss current event from the perspective of a health care administrator. Document your thoughts...", "stars": 3 }, { "url": "\/study-help\/questions\/7-a-series-of-transactions-for-ace-repair-is-given-975803", "description": "7. A series of transactions for Ace Repair is given below. Use the chart to show the effect of each of the transactions on assets, liabilities, and owner's equity by placing an x in the appropriate...", "stars": 3 }, { "url": "\/study-help\/questions\/clo3-sam-and-mike-are-discussing-using-a-new-project-3294407", "description": "(CLO3) Sam and Mike are discussing using a new project management framework. Mike mentions that no matter what the team should always be willing to try new things. Sam asks Mike to focus on the pros,...", "stars": 3 }, { "url": "\/study-help\/questions\/what-would-be-your-opinion-about-these-commenta-1-the-992872", "description": "What would be your opinion about these commenta? 1. The problem with prison gangs and violence is that there is no control inside those prisons. Corrections and jail wardens have a hard time...", "stars": 3 }, { "url": "\/study-help\/questions\/3-parametric-equations-parametric-equations-1-consider-the-parametric-equations-1005005", "description": "3 Parametric Equations Parametric Equations 1. Consider the parametric equations 3 x= t+1 = 2t 1 (a) For what values of t are the parametric equations defined? (b) Sketch a graph of the curve on the...", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/i-am-in-acct-5315-and-i-would-like-a-4245741", "next": "\/study-help\/questions\/lesson-6-problem-3-assumptions-the-stock-of-chadco-is-4245743" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Accounting", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-accounting" }, { "name": "Ben Ltd operates a number of supermarkets with an emphasis on the", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/ben-ltd-operates-a-number-of-supermarkets-with-an-emphasis-4245742" } ], "skill_details": { "skill_id": "9", "skill_name": "Accounting", "parent_id": "1" } }" } }