Question
On 1 July 2015 Heaven Ltd acquired all the issued shares of Hell Ltd for $130,000. At that date the accounts of Hell Ltd show
On 1 July 2015 Heaven Ltd acquired all the issued shares of Hell Ltd for $130,000. At that date the accounts of Hell Ltd show the following:
| Share capital | $ 50,000 |
| General reserve | $ 10,000 |
| Retained earnings | $ 15,000 |
On 1 July 2015 a plant owned by Hell Ltd was undervalued by $40,000. The plant was purchased for $150,000 at 1 July 2010 with estimated useful life of 20 years. Hell Ltd had a land with carrying amount of $40,000 that is valued at $60,000 on 1 July 2015. The land was sold by 30 June 2016. The consolidation adjustment entries at 30 June 2018 are as follows:
|
| Debit | Credit |
| Share capital | aaa |
|
| General reserve | bbb |
|
| Retained earnings | ccc |
|
| BCVR | ddd |
|
| Goodwill | eee |
|
| Investment in Hell Ltd |
| fff |
|
|
|
|
| Accumulated depreciation | ggg |
|
| Plant |
| hhh |
| BCVR |
| iii |
| DTL |
| jjj |
|
|
|
|
| Depreciation expense | kkk |
|
| Retained earnings |
| lll |
| Accumulated depreciation |
| mmm |
|
|
|
|
| DTL | nnn |
|
| Income tax expense |
| ooo |
| Retained earnings
|
| ppp |
|
|
|
|
| Retained earnings | qqq |
|
| BCVR |
| rrr |
|
|
|
|
Type in the value for ddd
Answer:
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
The Operational Auditing Handbook Auditing Business Processes
Authors: Andrew Chambers, Graham Rand
1st Edition
0471970603, 978-0471970606
