Question
Question: Trifles Ltd acquired 280,000 shares in Bamburg Ltd on 01 July (1 bookmark) Trifles Ltd acquired 280,000 shares in Bamburg Ltd on 01 July
Question: Trifles Ltd acquired 280,000 shares in Bamburg Ltd on 01 July (1 bookmark) Trifles Ltd acquired 280,000 shares in Bamburg Ltd on 01 July 2019 and as a result Trifles Ltd has a control of 80% in Bamburg. The purchased consideration transferred by Trifles Ltd in exchange of the shares in Bamburg Ltd was as follows: (1) Cash paid of $ 565,000 (m) Cash to be paid in four year time is $ 500,000 () Share exchange of two shares in Trifles Ltd for every seven shares in Bamburg Ltd. The market price of Trifles Ltd at the date of acquisition was $ 3. The par value of Trifles Ltd' ordinary shares is $ 0.5 each. Legal fees associated with the acquisition were $ 75,000. The cost of capital of Trifles Ltd is 15%
b) Assume that Trifles Ltd has only recorded the cash transaction of $ 565,000. Prepare the consolidated Statement of Financial Position (Equity and Liabilities section only) to show how the deferred consideration and the share exchange should be accounted for the year ended 30 June 2020.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started