On 1 July 2018, Red River Ltd acquired 70% of the share capital of Mekong Ltd for $1,200,000. The equity of Mekong Ltd was:

Share Capital$1,050,000

General Reserve$300,000

Retained Earnings$150,000

All assets of Mekong Ltd were recorded at Fair Value (FV) on acquisition, except for a piece of equipment that had a higher FV ($50,000) than its carrying amount. The cost of the equipment was $300,000, and accumulated depreciation is $196,000. The tax rate is 30%

Required:

Complete the worksheet below using the "Gross Method". (10 marks)

Elimination of investment is subsidiary (Mekong Ltd)

Mekong Ltd$

Red River Ltd 70% interest

30% NCI $

FV of consideration transferred

1,200,000

1,200,000

*Plus NCI measured at FV

less FV of assets acquired, liabilities assumed

Share capital on acquisition date

1,050,000

General Reserve on acquisition

300,000

Retained earnings on acquisition

150,000

FV adjustment

Fair Value of Net Identifiable Assets acquired

Goodwill on acquisition date