Question
(Consulate) Doganay Business acquired an 80% stake in Selen Enterprises and became a partner on January 1, 2020. The Balance Sheets of Doganay Business and
(Consulate) Doganay Business acquired an 80% stake in Selen Enterprises and became a partner on January 1, 2020.
The Balance Sheets of Doganay Business and Selen Business dated 1.1.2020 are as follows;
| DOGANAY BUSINESS 1.1.2020 DATE Balance sheet | SELEN BUSINESS 1.1.2020 DATE Balance sheet | Elimination | DOGANAY BUSINESS 1.1.2020 DATE consolidated | |
| Assets | ||||
| ROTATING HEIRS | ||||
| SAFE | 12,000 | 48,000 | ||
| CREDIT ACCOUNTS | 26,000 | 32,000 | ||
| COMMERCIAL STOCKS | 48.000 | 19,000 | ||
| STANDING ASSETS | ||||
| RELATED PARTNERSHIPS | 82,000 | 0 | ||
| RESISED ASSETS (net) | 122.300 | 96,400 | ||
| AVAILABILITY TOTAL | 290,300 | 195,400 | ||
| DEBTS AND EQUITY | ||||
| Obligations | ||||
| BANK LOANS | 70,000 | 80,000 | ||
| DEBT ACCOUNTS | 31,000 | 12,000 | ||
| PAYABLE EXPENSES | 8,300 | 3,400 | ||
| Equity | ||||
| CAPITAL | 120,000 | 80,000 | ||
| UNDISTRIBUTED PROFITS | 61,000 | 20,000 | ||
| TOTAL OF DEBT AND EQUITY | 290,300 | 195,400 |
Additional Information: Doganay Business will receive 10,000 TL from Selen Business.
Requested:
a) Is the goodwill to appear in the purchase process? If it turns out, how much does the honoree be worth? Show your calculations.
b) After the purchase of Doganay Business, if the Consolidated Balance Sheet of 01.01.2020 prepares the minority share, how much will it be worth? Clearly demonstrate your calculations.
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Auditing Cases
Authors: Frank A. Buckless, Mark. S. Beasley, Steven M. Glover, Douglas F. Prawitt
1st Edition
978-0130800015
