learn.mq.eau.au On 1 July 2015 Vega Ltd acquired 100% of the share capital of Bison Ltd for $465,000. At that date, the relevant balances in the records of Bison Ltd were: Share capital General Reserve Retained earnings 200,000 50,000 180,000 430.000 At the date of acquisition all assets and liabilities of Bison Ltd were recorded in the accounting records at amounts equal to their fair values with the exception of the following assets: Carrying amount Fair value Land Inventory Machinery (cost 40,000) 60,000 20,000 20,000 70,000 30,000 28,000 Immediately after acquisition the fair value adjustment for land was recorded in the books of Bison Ltd, all other fair value adjustments are made on consolidation. In respect of the inventory on hand at acquisition, half was sold by 30 June 2016 and the remaining amount is still on hand as at 30 June 2017. The machinery at acquisition has a further useful life of four (4) years and is still being used by Bison Ltd as part of its operations as at 30 June 2017. Bison Ltd had goodwill of $15,000 recorded as a non-current asset in its books at acquisition date. At acquisition date Bison Ltd was involved in a legal dispute that could potentially result in the company paying compensation to a customer due to injury caused as a result its product. This item was disclosed as a contingent liability in the notes to its financial statements as at 30 June 2014. Vega Ltd estimated the fair value of this liability to be $8,000 at acquisition date. This claim was subsequently settled on 31 March 2017 for a cash payment of $12,000. Additional information a) During the year ending 30 June 2016, Bison Ltd sold inventory to Vega Ltd for $27.000. This was sold at a mark-up of 35% book of Vega Ltd as at 30 June 2016 on cost. This entire inventory was still on hand in the b) During the year ended 30 June 2017. Bison Ltd purchased i inventory from Vega Ltd for $20,000. Vega Ltd made a profit of $5.000 from this transaction: this entire inventory has been sold to external parties during the course of the year On 1 January 2017, Bison Ltd sold an item of equipment to Vega Ltd for $21,000. The equipment had a cost of $30,000 and a carryi This equipment is considered to have a further useful life of five (5) years from date of transfer c) ing amount of $25,000 at the date of transfer learn.mq.eau.au On 1 July 2015 Vega Ltd acquired 100% of the share capital of Bison Ltd for $465,000. At that date, the relevant balances in the records of Bison Ltd were: Share capital General Reserve Retained earnings 200,000 50,000 180,000 430.000 At the date of acquisition all assets and liabilities of Bison Ltd were recorded in the accounting records at amounts equal to their fair values with the exception of the following assets: Carrying amount Fair value Land Inventory Machinery (cost 40,000) 60,000 20,000 20,000 70,000 30,000 28,000 Immediately after acquisition the fair value adjustment for land was recorded in the books of Bison Ltd, all other fair value adjustments are made on consolidation. In respect of the inventory on hand at acquisition, half was sold by 30 June 2016 and the remaining amount is still on hand as at 30 June 2017. The machinery at acquisition has a further useful life of four (4) years and is still being used by Bison Ltd as part of its operations as at 30 June 2017. Bison Ltd had goodwill of $15,000 recorded as a non-current asset in its books at acquisition date. At acquisition date Bison Ltd was involved in a legal dispute that could potentially result in the company paying compensation to a customer due to injury caused as a result its product. This item was disclosed as a contingent liability in the notes to its financial statements as at 30 June 2014. Vega Ltd estimated the fair value of this liability to be $8,000 at acquisition date. This claim was subsequently settled on 31 March 2017 for a cash payment of $12,000. Additional information a) During the year ending 30 June 2016, Bison Ltd sold inventory to Vega Ltd for $27.000. This was sold at a mark-up of 35% book of Vega Ltd as at 30 June 2016 on cost. This entire inventory was still on hand in the b) During the year ended 30 June 2017. Bison Ltd purchased i inventory from Vega Ltd for $20,000. Vega Ltd made a profit of $5.000 from this transaction: this entire inventory has been sold to external parties during the course of the year On 1 January 2017, Bison Ltd sold an item of equipment to Vega Ltd for $21,000. The equipment had a cost of $30,000 and a carryi This equipment is considered to have a further useful life of five (5) years from date of transfer c) ing amount of $25,000 at the date of transfer