Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

need solution of (iv) part only Question 4 The Parent company acquires all issued capital of the subsidiary company for a consideration of $1000000 cash

image text in transcribed

need solution of (iv) part only

Question 4 The Parent company acquires all issued capital of the subsidiary company for a consideration of $1000000 cash and 800000 shares each valued at $1.25. The surruary statement of financial position of the subsidiary company inmediately following the acquisition is: Fair value of assets acquired $2640000 Tair value of liabilities acquired $720000 Total shure capital the subsidiary company $800000 Retained earnings of the subsidiary company $1120000 Required: (1) Pass the necessary journal entry to record the acquisition (ii) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition (iii) Pass the necessary consolidation entry to eliminate the subsidiary by the parent company (iv) Determine the amount of goodwill (or bargain purchase) arising out of the acquisition if the purchase consideration paid was $1000000 cash and 400000 shares each valued at $1.25

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Audit Of The Future The Impact Of Technology Innovation

Authors: An Anthology Compiled And Contributed To By A. Michael Smith

1st Edition

1634540638, 978-1634540636

More Books

Students also viewed these Accounting questions