ECTION 35000 Total equity Le D. Ty Liquo , Liyulualors Cash and Shareholders Distribution accounts of Bield Question 12.9 Accounting by acquirer, liquidation journal entries by acquiree LO 5,7 110 The financial statements of Pacino Lid at 1 August 2016 contained the following information: Assots Equity Vehicles $ 30000 Share capital: 50000 shares $ 48000 Accumulated depreciation (4400) Retained earnings 25600 Delivery trucks 73600 Accumulated depreciation (6200) Machinery Accumulated depreciation 64000 Buildings 48000 Provisions 28000 Accumulated depreciation (4000) Payables 42000 Land 80000 Acctlunts payable 18800 Cash 2000 Total liabilities 152800 Accounts receivable Inventory 17200 $226400 Total assets $226 400 Total equity and liabilities 19800 Liabilities (3000). Loans 12000 Pacino Lid is involved in the manufacture of fine Italian leather shoes. The company was established by the de Niro brothers over 100 years ago. The family became very wealthy as their shoes were prized by the fashion conscious in the community. However, the current manager, Roberto de Niro, wants to retire and leave the business to the family. The two boys who are the sons of Roberto do not want to continue in the family business. Roberto then offers to sell the dat un hy the manager and owner. Vito Corleone. memory 17200 Total assets $226400 1019 cquity and Pacino Lid is involved in the manufacture of fine Italian leather shoes. The company was established by the de Niro brothers over 100 years ago. The family became very wealthy as their shoes were prized by the fashion conscious in the community. However, the current manager, Roberto de Niro, wants to retire and leave the business to the family. The two boys who are the sons of Roberto do not want to continue in the family business. Roberto then offers to sell the business to his main rival, Al Ltd, which is headed up by the manager and owner, Vito Corleone. Vito and Roberto come to an agreement by which Al Lid will take over Pacino Ltd. Al Lid will acquire all the assets of Pacino Ltd except for the cash and the motor vehicles. In exchange, Al Ltd will give the shareholders of Pacino Ltd a block of land valued at $96000 and a motor vehicle valued at $20 400. These assets are currently held by Al Lid. The land is carried at cost of $40 000 while the motor vehicle is carried at $20000, being cost of $21000 and accumulated depreciation of $1000. Al Ltd will also provide sufficient additional cash to enable Pacino Ltd to pay off the accounts payable and the liquidation expenses of $1200. On liquidation of Pacino Ltd, the land and the motor vehicles will be distributed to the sons of Roberto de Niro. Chapter 12 Business combinations 623 ELETIVO Al Ltd incurred legal and valuation costs of $2000 in undertaking the business combinatie The assets and liabilities of Pacino Lid are recorded at amounts equal to fair value exce the following: ir value except for Land Buildings Machinery Delivery trucks Inventory Fair value $100000 56000 20000 30000 20000 BALLtd also recognised the brand Pacino, that was not recognised in the records of Pacino Lid as it was an internally developed brand. It was calculated that this brand had a fr value of $26.0110. B Prepare the fourth entries in Al L o record the acquisition of the assets and liabilities of DELKI Prepare the journal entries to record the liquidation of Pacino Lid. i Ini