Question 3

Pare plc acquired 75% of the shares of Banan plc for $ 90,000 cash on 1 January 2010. At that date, the fair value of net assets of Banan plc was $80,000. Banan plc had a profit of $60,000 for the year ends 31 December 2010. Assume that Pare sells its entire 75%% stake in Banan plc for 130,000 on 31 December 2010.

1.What is the worksheet Journal Entry for the group that should be recorded upon the sale of the entire 75% stake in Banan on 31 December 2010?

2.What is the journal Entry that the Parent Company Pare should record upon the sale of the entire 75% stake in Banan on 31 December 2010?