1 July 2019 Gail Ltd acquired all issued shares of Ray Ltd for $90000. The Ray Ltd financial records show followings. Share capital 10000 @ 5 $50000 General Reserve 25000 Retained Earnings 15000 All assets and liabilities of Ray Ltd recorded at amount equal to fair value at that date. On January 2020, Ray Ltd transferred $ 5000 from general reserve existing at 1 July 2019 to retained earnings. a) Preapare pre-acquisition entries at 1 July 2019 b) Preapare pre-acquisition entries at 30 June 2020
1 July 2019 Gail Ltd acquired all issued shares of Ray Ltd for $90000. The Ray Ltd financial records show followings. Share capital 10000 @ 5 $50000 General Reserve 25000 Retained Earnings 15000 All assets and liabilities of Ray Ltd recorded at amount equal to fair value at that date. On January 2020, Ray Ltd transferred $ 5000 from general reserve existing at 1 July 2019 to retained earnings. a) Preapare pre-acquisition entries at 1 July 2019 b) Preapare pre-acquisition entries at 30 June 2020
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
1 July 2019 Gail Ltd acquired all issued shares of Ray Ltd for $90000. The Ray Ltd financial records show followings.
Share capital 10000 @ 5 $50000
General Reserve 25000
All assets and liabilities of Ray Ltd recorded at amount equal to fair value at that date. On January 2020, Ray Ltd transferred $ 5000 from general reserve existing at 1 July 2019 to retained earnings.
a) Preapare pre-acquisition entries at 1 July 2019
b) Preapare pre-acquisition entries at 30 June 2020
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education