Full and partial goodwill methods On 1 July 2019, SydMel Ltd acquired 80% of the issued shares of Sydney Ltd for $165 000. At this date, the equity of Lee Ltd was: Share capital $100 000 General reserve 40 000 Retained earnings 50 000 At acquisition date all the identifiable assets and liabilities of Sydney Ltd were recorded at amounts equal to fair value. At 30 June 2021, the equity of Sydney Ltd consisted of: Share capital $100 000 General reserve 50 000 Retained earnings 80 000 During the 2020–21-year Sydney Ltd recorded a profit of $15 000. Required: Prepare the consolidated worksheet entries at 30 June 2021 for SydMel Ltd assuming: At 1 July 2019, the fair value of the non-controlling interest was $39 000 and SydMel Ltd adopts the full goodwill method. SydMel Ltd adopts the partial goodwill method.
Full and partial goodwill methods On 1 July 2019, SydMel Ltd acquired 80% of the issued shares of Sydney Ltd for $165 000. At this date, the equity of Lee Ltd was: Share capital $100 000 General reserve 40 000 Retained earnings 50 000 At acquisition date all the identifiable assets and liabilities of Sydney Ltd were recorded at amounts equal to fair value. At 30 June 2021, the equity of Sydney Ltd consisted of: Share capital $100 000 General reserve 50 000 Retained earnings 80 000 During the 2020–21-year Sydney Ltd recorded a profit of $15 000. Required: Prepare the consolidated worksheet entries at 30 June 2021 for SydMel Ltd assuming: At 1 July 2019, the fair value of the non-controlling interest was $39 000 and SydMel Ltd adopts the full goodwill method. SydMel Ltd adopts the partial goodwill method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Full and partial
On 1 July 2019, SydMel Ltd acquired 80% of the issued shares of Sydney Ltd for $165 000. At this date, the equity of Lee Ltd was:
|
Share capital |
$100 000 |
|
General reserve |
40 000 |
|
|
50 000 |
At acquisition date all the identifiable assets and liabilities of Sydney Ltd were recorded at amounts equal to fair value. At 30 June 2021, the equity of Sydney Ltd consisted of:
|
Share capital |
$100 000 |
|
General reserve |
50 000 |
|
Retained earnings |
80 000 |
During the 2020–21-year Sydney Ltd recorded a profit of $15 000.
Required:
Prepare the consolidated worksheet entries at 30 June 2021 for SydMel Ltd assuming:
- At 1 July 2019, the fair value of the non-controlling interest was $39 000 and SydMel Ltd adopts the full goodwill method.
- SydMel Ltd adopts the partial goodwill method.
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