Corporate Accounting

AutoSave OFF w- TACC605 T5 2020 - Saved to my Mac Home Insert Draw Design Layout References Mailings Review View Table Design Layout Tell me Share Comments Calibri 11 A A Aa Ap AL AaBbCcDdEe AaBbCcDdEE AaBbCcDdEE AaBbCcDdEE Paste B I Uvab X X A DAY Heading 2 Normal Normal_Time... Style1 Styles Dictate Sensitivity Pane Question 5 (22 marks) On 1 July 2020, the financial position of Aquaman Led was as follows: Carrying Fair value Assets amount Cash Accounts receivable $200 000 200 000 800 000 800 000 Plant 2 100 000 1 600 000 Accumulated depreciation - plant (600 000) Fixtures & fittings 900 000 850 000 Accumulated depreciation - fixtures & fittings 100 000 Land 1 100 000 1 500 000 Vehicles 800 000 610 000 Accumulated depreciation - vehicles (200 000) Total assets $5 000 000 Equity Share capital - 100 000 shares 2 500 000 Retained earnings 2 000 000 Total equity 4 500 000 Liabilities Accounts payable 100 000 100 000 Loans 400 000 400 000 Total liabilities Total equity and liabilities 500 000 $5 000 000 Thor Ltd acquired all the assets and assumed all the liabilities of Aquaman. Ltd on 1 July 2020. In exchange, Thor Ltd agreed to: . issue 5 Thor Ltd shares for every Aquaman Lid share held. Thor Lid shares were assessed to have a fair value of $7 per share. Costs of share issue were $1 000. . transfer a patent to the former shareholders of Aquaman, Led; the patent had been internally generated by Aquaman, Led and was carried at $ 1 000 000. It was considered to have a fair value of $1 600 000. . pay cash of $3.00 per share to the former shareholders of Aquaman Ltd for each share held in Aquaman Lid. At 30 June 2020, Aquaman Lid reported a contingent liability relating to a guarantee given to another entity. Aquaman Lid did not record the guarantee as a liability because of the difficulty of measuring the liability. The fair value of this contingent liability was assessed as $20 000. Thor Ltd incurred $9 000 in costs in relation to accounting and legal fees in relation to its acquisition of Aquaman Lid. Required 11 Prepare the journal entries in the records of Thor Led with regard to the acquisition of Aquaman Lid on 1 July 2020. 11 of 16 1667 words X English (United States) Focus + 68%