d Ltd acquired all the issued shares (Cum-div.) of Mel Ltd on 1 July 2021. At this date the financial position of Matt Ltd was as follows:     Carrying Amount Fair Value Plant $300 000 280 000      Accumulated Depreciation (60 000)   Account Receivables 25 200 25 200 Cash 15 000 15 000 Inventories 15 600 20 600   295 8

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Syd Ltd acquired all the issued shares (Cum-div.) of Mel Ltd on 1 July 2021. At this date the financial position of Matt Ltd was as follows:

 

 

Carrying Amount

Fair Value

Plant

$300 000

280 000

     Accumulated Depreciation

(60 000)

 

Account Receivables

25 200

25 200

Cash

15 000

15 000

Inventories

15 600

20 600

 

295 800

 

 

 

 

Share Capital

220 000

 

General Reserve

23 400

 

Retained Earnings

24 200

 

Provisions of Employee benefits

19 200

19 200

Dividend Payable

9 000

9 000

 

295 800

 

 

 

 

 

Additional information:

 

The assets of Mel Ltd did not include a patent that was valued by Robert Ltd at $12 000. Its useful life was considered to be5 years, with benefits being received equally over that period.

The plant was considered to have a further 10-year life and is depreciated on a straight-line basis.

All the pre-acquisition inventories were not sold by 30 June 2019.

An interim dividend of $10,000 paid by Mel Ltd in September 2020.

Syd Ltd declared a final dividend of $20 000 in June 2020.

 

In exchange for the shares in Mel Ltd, Syd Ltd gave the following consideration:

• 80 000 shares in Robert Ltd, each share having a fair value of $3.50 per share
• cash of $44 000
• Artwork having a fair value of $35 000.

 

Robert Ltd incurred legal and accounting costs of $4 500 and share issue costs of $3 000.

 

The tax rate is 30%.

 

Required:

a. Prepare Acquisition Analysis at 1 July 2020.
 
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