Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 5 (11 marks) (Note this question is from the Week 10 Tutorial) On 1st July, 2018 Nile Ltd acquired 70% of the share capital

Question 5 (11 marks) (Note this question is from the Week 10 Tutorial)
On 1st July, 2018 Nile Ltd acquired 70% of the share capital of Amazon Ltd for $80,000,000. The equity of Amazon Ltd as at the acquisition date was:
Share Capital General Reserve Retained Earnings
$ 52,000,000 $ 20,000,000 $ 10,000,000
All assets of Amazon Ltd were recorded at fair value on acquisition, except for one property which had a fair value which was $2,000,000 lower than its carrying amount. The cost of the property was $20,000,000 with accumulated depreciation of $12,000,000. Ignore Taxes.
Required:
(a) Complete the worksheet below using the NET method. (4.5 marks)
(b) Prepare the consolidation adjustments and eliminations entries and recognise the NCI in the pre-acquisition equity of Amazon Ltd, assuming that the NCI was measured at the proportionate share of the acquirees identifiable net assets. (6.5 marks)
Elimination of Investment in Amazon Ltd
Amazon Ltd (S) $,000
Nile Ltd (70% of Amazon) (P) $,000
30% NCI $,000
Fair Value of consideration transferred
Less: FV of identifiable assets acquired & liabilities assumed
Share capital on acquisition date
General reserve-acquisition date Retained earnings-acquisition date Fair value adjustment
Goodwill on acquisition Non-controlling interest
52,000 20,000 10,000

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

Step: 3

blur-text-image

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

Audit Analytics Data Science For The Accounting Profession

Authors: J. Christopher Westland

1st Edition

3030490904, 9783030490904

More Books

Students also viewed these Accounting questions

Question

What does MRP 2 stand for?

Answered: 1 week ago

Question

find all matrices A (a) A = 13 (b) A + A = 213

Answered: 1 week ago