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RedSky Ltd. has the following balance sheets for 31 December 2023. Prepare the consolidated balance sheet for 31 December 2023. RedSky Ltd Balance Sheet as

RedSky Ltd. has the following balance sheets for 31 December 2023. Prepare the consolidated balance sheet for 31 December 2023.

RedSky Ltd Balance Sheet as at 31 December 2023

Assets

Amount

Investment in subsidiary (60,000 shares bought 31.12.2022)

$180,000

Fixed assets

$250,000

Current assets

$70,000

Total

$500,000

Liabilities and Equity

Amount

Share capital

$350,000

Profit and loss account (31.12.2022)

$60,000

Add Profit for 2023

$90,000

Total

$500,000

BlueMoon Ltd Balance Sheet as at 31 December 2023

Assets

Amount

Fixed assets

$90,000

Current assets

$50,000

Total

$140,000

Liabilities and Equity

Amount

Share capital

$70,000

Profit and loss account (31.12.2022)

$10,000

Add Profit for 2023

$60,000

Total

$140,000

Requirement: Prepare the consolidated balance sheet for RedSky Ltd. and its subsidiary as at 31 December 2023. Calculate the goodwill on acquisition.

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