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Q3. XY Ltd acquired 70% equity shares of Z Ltd. on 30/04/2020 for a cost GHC40,000. At that time the retained losses were GH10,000.
Q3. XY Ltd acquired 70% equity shares of Z Ltd. on 30/04/2020 for a cost GHC40,000. At that time the retained losses were GH10,000. Their balance sheets before business combination as at 30/04/2020 are as follows: XY Ltd. Z Ltd. GHe GHe Non-current assets (tangible) 50,000 30.000 Other intangible assets 10,000 5.000 Investment in Z Ltd. 43,000 nil 17,000 15.000 Current assets 120.000 50,000 Financed by Equity share capital at GH1 each 65,000 30.000 Retained earnings 36,000 14,000 Current liabilities 19.000 6.000 110,000 50.000 The 30% equity shares not acquired was fair-valued at GH18,000. Ignore any deferred tax implications on the acquisition after one year's time.
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