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Please show all your calculations part and provide the answer clearly. Thanks in advance, On 1 July 2014 Padma Ltd acquires 25 per cent of
Please show all your calculations part and provide the answer clearly.
Thanks in advance,
On 1 July 2014 Padma Ltd acquires 25 per cent of the issued capital of Jamuna Ltd for a cash consideration of $360000.At the date of acquisition, the shareholders' equity of Jamuna Ltd is: Share capital $450000 Retained earnings $300000 Total shareholders' equity $750000 Additional information On the date of acquisition, buildings have a carrying amount in the accounts of Jamuna Ltd of $240000 and a market value of $300000. The buildings have an estimated useful life of 10 years after 1 July 2014. For the year ending 30 June 2015 Jamuna Ltd records an after-tax profit of $90000, from which it pays a dividend of $30000. For the year ending 30 June 2016 Jamuna Ltd records an after-tax profit of $300000, from which it pays a dividend of$150000. Assume a tax rate of 30% is assumed Required Apply equity method of accounting to: (a)Calculate the amount of goodwill at the date of acquisition of Jamuna Ltd (b)Prepare the journal entries for the year ending 30 June 2015 of Jamuna Ltd (c)Prepare the journal entries for the year ending 30 June 2016 of Jamuna LtdStep by Step Solution
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