Workshop 9

Furniture Limited acquired 80% of the shares in Maserati Limited for a cash consideration of $180 000. At acquisition date, share capital in Maserati Limited was $100 000 and reserves amounted to $50 000. All assets and liabilities of Maserati Limited were recorded at fair value at acquisition date except buildings which was recorded at $10 000 below fair value. The company tax rate was 28% and the partial

goodwill method was adopted by Furniture Limited to value its Non-controlling Interest.

Required

Prepare the appropriate consolidation journal entry to eliminate the investment in Maserati Ltd on acquisition date.