On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltd issued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of Eldorado Ltd. The costs of issuing the shares by Quick Buck Ltd cost $1,600. At this date the statement of financial position of Eldorado Ltd was as follows: Carrying amount $40,000 Fair value Machinery Fixtures & fittings $67,000 68,000 60,000 Vehicles 35,000 10,000 (16.000) $129,000 Share capital (80,000 shares at $1.00 per share) $80,000 20,000 29,000 $129,000 35,000 12,000 (18,000) Current assets Current liabilities Total net assets General reserve Retained earnings Total equity Required: Prepare the journal entries in the records of Quick Buck Ltd at 1 July 2019 for the acquisition.

On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltd issued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of Eldorado Ltd. The costs of issuing the shares by Quick Buck Ltd cost $1,600. At this date the statement of financial position of Eldorado Ltd was as follows: Carrying amount $40,000 Fair value Machinery Fixtures & fittings $67,000 68,000 60,000 Vehicles 35,000 10,000 (16.000) $129,000 Share capital (80,000 shares at $1.00 per share) $80,000 20,000 29,000 $129,000 35,000 12,000 (18,000) Current assets Current liabilities Total net assets General reserve Retained earnings Total equity Required: Prepare the journal entries in the records of Quick Buck Ltd at 1 July 2019 for the acquisition.

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 28E

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On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltdissued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of EldoradoLtd. The costs of issuing the shares by Quick Buck Ltd cost $1,600.At this date the statement of financial position of Eldorado Ltd was as follows: c Carrying amount Fair valueMachinery $40,000 $67,000Fixtures & fittings 60,000 68,000Vehicles 35,000 35,000 Current assets 10,000 12,000Current liabilities (16,000) (18,000)Total net assets…
On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltd issued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of Eldorado Ltd. The costs of issuing the shares by Quick Buck Ltd cost $1,600. At this date the statement of financial position of Eldorado Ltd was as follows: Carrying amount Fair value Machinery $ 40,000 $ 67,000 Fixtures & fittings 60,0000 68,000 Vehicles 35,000 35,000 Current assets 10,000 12,000 Current liabilities (16,000) (18,000) Total net assets $ 129,000 Share capital (80,000 shares at $1.00 per share) $ 80,000 General reserve 20,000 Retained earnings 29,000 Total equity 129,000 Required:Prepare the journal entries in the records of Quick Buck Ltd at 1 July 2019 for the acquisition.
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