part a
Question 5 Scenario On 30 June 2022. Anomie Ltd acquired 75% of the voting shares of Morehouse Ltd 77.500 shares of the total 10,000 shares on issue). As consideration, Anomie Ltd paid $44.00 in cash per share: in addition, Anomie also issued two of its own shares in exchange for every share in Morehouse Ltd. On the acquisition date, Anomie Ltd's shares were trading at $40.00 per share. On 30 June 2022, the net assets of Morehouse Ltd were represented by: The due diligence process revealed that all of Morehouse Ltd's assets and liabilities were stated at fair value on the acquisition date, except the following: (i) Land was undervalued by $200,000. (ii) Inventory was overvalued by $6,000. (iii) Machinery was undervalued by $140,000. The machinery was recorded at cost of $150,000 with accumulated depreciation of $10,000. The fair value of the machine was $280,000. Morehouse Ltd depreciates the machine over a remaining useful life of 10 years with no residual value. During the year ended 30 June 2023 , the following transactions occurred: Morehouse Ltd sold all of the overvalued inventory to an external party. The undervalued land and machinery were still on hand at the end of the year. The due diligence process revealed that all of Morehouse Ltd's assets and liabifities were stated at. fair value on the acquisition date, except the following: (i) Land was undervalued by $200,000. (ii) Irventory was overvalued by $6,000. (iii) Machinery was undervalued by $140,000. The machinery was recorded at cost of $150.000 with accumulated depreciation of $10,000. The fair value of the machine was $280,000. Morehouse Ltd depreciates the machine over a remaining useful life of 10 years with no residual value. During the year ended 30 June 2023, the following transactions occurred: (a) Morehouse Ltd sold all of the overvalued inventory to an external party. (b) The undervalued land and machinery were still on hand at the end of the year. (c) Morehouse Ltd recorded a profit (after tax) of $30,000. (d) On 30 June 2023, Morehouse transferred $20.000 of this post-acquisition profit from retained earnings into general reserve. On 30 June 2023 , the financial records provided by Morehouse Ltd showed the following: Assume that there were no other movements of pre-acquisition equity of Morehouse Ltd other than those as detailed in the facts above. The corporate tax rate is 30%. Pequired: Assume that there were no other mavements of pre-acquisition equity of Morehouse Ltd other thain those as detriled in the facts above. The corporate tax rate is 30%. Required: Part (A): Complete the acquisition analysis for the Anomie Ltd Group using the Partial Goodwill Method (4 marks). Part (B): Provide the consolidation adjustment entries for the Anomie Ltd Group at 30 June 2023 (21 marks). There is no worksheet provided in this question and therefore you are not required to post the entries to a worksheet. When making adjustments to the relevant accounts, you can assume that each account that you need to adjust exists in the worksheet. Show all calculations. Part (C): Calculate the value of Non-Controlling Interest ( NCl) as at 30 June 2023 ( 5 marks). Show all calculations. Formatting requirements: In all journal entries, you must specify whether the entry is a debit or credit entry by including "Dr" or "Cr" before the account name. Credit entries must also be indented. Journal entries which do not follow these requirements will be awarded a mark of zero. Below are examples of correctly formatted journal entries: Complete the acquisition analysis for the Anomie Ltd Group using the Partial Goodwill Method. Question 5 Scenario On 30 June 2022. Anomie Ltd acquired 75% of the voting shares of Morehouse Ltd 77.500 shares of the total 10,000 shares on issue). As consideration, Anomie Ltd paid $44.00 in cash per share: in addition, Anomie also issued two of its own shares in exchange for every share in Morehouse Ltd. On the acquisition date, Anomie Ltd's shares were trading at $40.00 per share. On 30 June 2022, the net assets of Morehouse Ltd were represented by: The due diligence process revealed that all of Morehouse Ltd's assets and liabilities were stated at fair value on the acquisition date, except the following: (i) Land was undervalued by $200,000. (ii) Inventory was overvalued by $6,000. (iii) Machinery was undervalued by $140,000. The machinery was recorded at cost of $150,000 with accumulated depreciation of $10,000. The fair value of the machine was $280,000. Morehouse Ltd depreciates the machine over a remaining useful life of 10 years with no residual value. During the year ended 30 June 2023 , the following transactions occurred: Morehouse Ltd sold all of the overvalued inventory to an external party. The undervalued land and machinery were still on hand at the end of the year. The due diligence process revealed that all of Morehouse Ltd's assets and liabifities were stated at. fair value on the acquisition date, except the following: (i) Land was undervalued by $200,000. (ii) Irventory was overvalued by $6,000. (iii) Machinery was undervalued by $140,000. The machinery was recorded at cost of $150.000 with accumulated depreciation of $10,000. The fair value of the machine was $280,000. Morehouse Ltd depreciates the machine over a remaining useful life of 10 years with no residual value. During the year ended 30 June 2023, the following transactions occurred: (a) Morehouse Ltd sold all of the overvalued inventory to an external party. (b) The undervalued land and machinery were still on hand at the end of the year. (c) Morehouse Ltd recorded a profit (after tax) of $30,000. (d) On 30 June 2023, Morehouse transferred $20.000 of this post-acquisition profit from retained earnings into general reserve. On 30 June 2023 , the financial records provided by Morehouse Ltd showed the following: Assume that there were no other movements of pre-acquisition equity of Morehouse Ltd other than those as detailed in the facts above. The corporate tax rate is 30%. Pequired: Assume that there were no other mavements of pre-acquisition equity of Morehouse Ltd other thain those as detriled in the facts above. The corporate tax rate is 30%. Required: Part (A): Complete the acquisition analysis for the Anomie Ltd Group using the Partial Goodwill Method (4 marks). Part (B): Provide the consolidation adjustment entries for the Anomie Ltd Group at 30 June 2023 (21 marks). There is no worksheet provided in this question and therefore you are not required to post the entries to a worksheet. When making adjustments to the relevant accounts, you can assume that each account that you need to adjust exists in the worksheet. Show all calculations. Part (C): Calculate the value of Non-Controlling Interest ( NCl) as at 30 June 2023 ( 5 marks). Show all calculations. Formatting requirements: In all journal entries, you must specify whether the entry is a debit or credit entry by including "Dr" or "Cr" before the account name. Credit entries must also be indented. Journal entries which do not follow these requirements will be awarded a mark of zero. Below are examples of correctly formatted journal entries: Complete the acquisition analysis for the Anomie Ltd Group using the Partial Goodwill Method
