Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 1. Consolidation of wholly owned subsidiary, pre -acquisition equityand BCVR entries for assets and liabilities. Lisa Ltd acquired all the issued shares of Kam

Question 1.

Consolidation of wholly owned subsidiary, pre -acquisition equityand BCVR entries for assets and liabilities.

Lisa Ltd acquired all the issued shares of Kam Ltd on 1 January 2016 for $88,000. At this date the equity of Kam Ltd consisted of

Share Capital $100,000

General Reserves $50,000

Retained Earnings $10,000

All the identifiable assets and liabilities of Kam Ltd were recorded at amounts equal to their fair values except for:

Carrying amount Fair Value

Fixtures & Fittings (cost $70 000) $50,000 $60,000

Inventory $10,000 $20,000

Of the inventory on hand at 1 January 2016, 90% was sold by 30June 2016. The remainder was all sold by 30 June 2017. TheFixtures & Fittings was considered to have a further 2 -year lifewith benefits to be received equally in each of those years. Therewere no records in the books for a provision of legal claim worth15,000 and patents of 90,000. These were reflected at fair value.

Required:

Prepare the consolidated worksheet entries for the consolidated financial statements prepared by Lisa Ltd at 30 June 2016.

Show acquisition analysis calculation, BCVR entries and Pre-acquisition entries for 30.6.16

image text in transcribed Of the inventory on hand at 1 January 2016, 90% was sold by 30 June 2016. The remainder was all sold by 30 June 2017. The Fixtures & Fittings was considered to have a further 2 -year life with benefits to be received equally in each of those years. There were no records in the books for a provision of legal claim worth 15,000 and patents of 90,000. These were reflected at fair value. The tax rate is 30%. Required Prepare the consolidated worksheet entries for the consolidated financial statements prepared by Lisa Ltd at 30 June 2016. Show acquisition analysis calculation, BCVR entries and Preacquisition entries for 30.6.16 question 2 (10 marks1 The following information has been extracted from the accounting records of Samoa Ltd for the year ended 30 June Question 1 (20 marks) 2016: Debit Credit Consolidation of wholly owned subsidiary, pre -acquisition Sales $5 000 000 equity andpaid BCVR entries for assets and liabilities Dividends $ 10 000 Cost of sales Finance costs 3 500 000 100 000 Lisa Ltd acquired all the issued shares Kam Ltd on 1 January Distribution costs 200of 000 2016 for from $88general 000.reserve At this date the equity of Kam Transfer 33 Ltd 000 consisted of Marketing costs Administrative costs Proceeds from sale ofShare plant andcapital machinery Carrying amount of plant and machinery 66 000 99 000 General reserve Tax rate is 30%. Retained earnings 40 000 $ 80 000 100 000 50 000 10 000 All the identifiable assets and liabilities of Kam Ltd were Required recorded amounts of equal to their fairand values for: Prepare aatstatement profit or loss otherexcept comprehensive income for Samoa Ltd, for the year ended 30 June 2016, and Carrying amount Fair value notes to the accounts in compliance with AASB 101. Please Fixtures & Fittingsby(cost $70 000) classify expenses function. Inventory 10 000 $50 000 $60 000 20 000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Access For Computer Accounting

Authors: Donna Kay

19th Edition

1259741109, 9781259741104

More Books

Students also viewed these Accounting questions