Question
On 1 July 2021, Xero Ltd acquired 90% of the issued shares of Accounting Ltd for $750,000 when the equity of Accounting Ltd consisted of:
On 1 July 2021, Xero Ltd acquired 90% of the issued shares of Accounting Ltd for $750,000 when the equity of Accounting Ltd consisted of:
| Share Capital | $400,000 |
| Retained Earnings | $150,000 |
| Asset Revaluation reserve | $50,000 |
At the acquisition date all the identifiable assets and liabilities of Accounting Ltd were recorded at fair value except for the following assets:
|
| Carrying Amount | Fair Value |
| Equipment (Cost $100,000) | $160,000 | $200,000 |
| Land | $560,000 | $700,000 |
The NCI at acquisition date is measured based on the proportionate share of the identifiable assets and liabilities in Accounting Ltd. The tax rate is 30%.
Required
Prepare Acquisition analysis as at 1 July 2021
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