Question
On 1 July 2019 Mickey Ltd acquired the shares of Mouse in exchange for 10000 shares with fair value of $3 each. On the date
On 1 July 2019 Mickey Ltd acquired the shares of Mouse in exchange for 10000 shares with fair value of $3 each. On the date of acquisition, the equity sections of the balance sheets of Mickey Ltd and Mouse Ltd showed the following respectively:
Mickey Ltd Extract from the Balance Sheet as at 1 July 2020
Share capital
$65000
Retained earnings
$20000
Cash at bank
$15000
Land
$40000
Investment in Leela Ltd
$30000
Mouse Ltd Extract from the Balance Sheet as at 1 July 2020
Share capital
$15000
Retained earnings
$10000
Cash at bank
$5000
Inventories (fair value is $4000)
$2000
Patent( fair value is $15000)
$18000
\ The Company tax rate is 30%.
Required:
1.Complete the acquisition analysis as at the date of acquisition. (8 marks)
2.Prepare the adjusting journal entries for the consolidation worksheet at 1 July 2020.
(17 marks)
3.Complete the consolidation worksheet as at 1 July 2020. (15 marks)
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Ethical Obligations and Decision Making in Accounting Text and Cases
Authors: Steven M. Mintz, Roselyn E. Morris
5th edition
1259969460, 73403997, 1260480852, 978-1259969461
