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The statements of financial position ( SFP ) of AX Inc. and BY Ltd . on December 3 1 , Year - 1 were as
The statements of financial position SFP of AX Inc. and BY Ltd on December Year were
as follows:
On December Year AX acquired shares of BYS common shares for $
plus an agreement to pay an additional $ if the company sales grew by more than over
the next two years. An independent business valuator valued this contingent consideration at
$ had this been paid at the date of acquisition itself. At this date, just before the acquisition
BYs shares were trading for $ per share.
Additional information Direct costs of acquisition were $ An unreported new patent by
BY Inc. was valued at $
Required:
Calculate consolidated goodwill and prepare the consolidated statement of financial
position at the date of acquisition under each of the following:
Identifiable net assets INA method
Fair value enterprise FVE method
Calculate consolidated goodwill at the date of acquisition under the proportionate
consolidation method.
Prepare the journal entries ONLY under the Worksheet approach FVE Method
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