Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
The World Retailing Ltd acquires 80 per cent of the shares of Mark Construction Ltd on 30 June 2019 for a consideration of $584 000.
The World Retailing Ltd acquires 80 per cent of the shares of Mark Construction Ltd on 30 June 2019 for a consideration of $584 000. The share capital and reserves of Mark Construction Ltd at the date of acquisition are: Share capital $200 000 Retained earnings $100 000 Revaluation surplus $150 000 There are no transactions between World Retailing Ltd and Mark Construction Ltd at the date of acquisition. All assets of Mark Construction Ltd are fairly valued at the date of acquisition, except for a major plant that had a fair value $25 000 greater than its carrying amount. The cost of the plant was $125 000 and it had accumulated depreciation of $90 000. In addition, the World Retailing Ltd acquired 100 per cent of the shares of Adelaide Retailing Ltd on 1 July 2017-that is two years earlier. The cost of investment was $500 000. At that date the capital and reserves of Adelaide Retailing Ltd were: Share capital $255 000 Retained earnings $205 000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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