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 35,000 Current assets 10,000 12,000 Current liabilities (18,000) (16,000) $129,000 Total net assets Share capital (80,000 shares at $1.00 per share) $80,000 General reserve Retained earnings Total equity 20,000 29,000 $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 $40,000 Fair value Machinery Fixtures & fittings $67,000 68,000 60,000 Vehicles 35,000 35,000 Current assets 10,000 12,000 Current liabilities (18,000) (16,000) $129,000 Total net assets Share capital (80,000 shares at $1.00 per share) $80,000 General reserve Retained earnings Total equity 20,000 29,000 $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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