On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. QuickBuck Ltd issued 80,000 shares having a fair value of $2.40 per share in exchange for the netassets 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 valueMachinery $40,000 S67,000Fixtures & fittings 60,000 68,000Vehicles 35,000 35,000Current assets 10,000 12,000Current liabilities (16,000) (18,000)Total net assets S129,000Share capital (80,000 shares at $1.00 per share) $80,000General reserve 20,000Retained earnings 29,000Total equity $129,000Required:Prepare the journal entries in the records of Quick Buck Ltd at 1 July 2019 for the acquisition.

A journal entry is the recording of financial transactions in books of the business entity. It…

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 60,000 68,000 Vehicles 35,000 35,000 Current assets 10,000 12,000 Current liabilities (16,000) (18,000) Total net assets S129,000 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.

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 60,000 68,000 Vehicles 35,000 35,000 Current assets 10,000 12,000 Current liabilities (16,000) (18,000) Total net assets S129,000 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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