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)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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
Financial Reporting And Analysis
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
8th Edition
1260247848, 978-1260247848
